Allowable Closing Costs For HUD Properties for Sale

There are closing costs for the buyers when that purchase HUD Properties for Sale.  Some of these closing costs are paid automatically by HUD for HUD homes for sale. There are also certain buyer closing costs that you can ask HUD to pay for you. These closing costs have to be included in Line 5 of the Sale Contract.

HUD will not pay all of your closing costs, there are certain buyer closing costs that are allowed if you included them in your contract that you submit.

THE CLOSING COSTS PAID AUTOMATICALLY BY HUD

HUD will pay up to 3% of the purchase price for these allowable closing costs.

1. Proration of property taxes and any special assessments such as Homeowner's Association fees and utility bills.

2. Condominium or HOA Trasfer Fee, if applicable.

3. Cost to provide condominium documents to purchaser.

4. Repair Escrow Fee of $200 where applicable.

5. Settlement or Closing Agent Fee. HUD will pay HUD's closing agnet. If the purchaser uses a different closing agent; it is at the purchaser cost.

6. Recording Fees.

CLOSING COSTS THAT MAY BE PAID BY HUD(IF THEY ARE INCLUDED WITH THE BID ON LINE 5 AND UP TO 3% OF PURCHASE PRICE)

1. Appraisal Fee- HUD will also pay for the Appraisal on an FHA 203(K) loan that is necessary to determine the "after rehab" value.

2. Credit Report- Up to $20.

3. Flood Certification- If the property is being offered with FHA insurance and is in a flood plain, HUD will pay for the Flood Certification.

4. Home Inspection- Including testing for lead based paint, radon and mold if not already tested.

5. Homeowner's Warranty- The actual cost, limits in each state.

6. Loan Discount Points- Up to 3% to buy down the rate with certification from lender.

7. Loan Origination Fee- Up to 1% will be paid on conventional and FHA mortgages, up to 1 1/2% on FHA 203(K).

8. Prepaid and Escrow Items for OWNER-OCCUPANT PURCHASERS ONLY. Exclude hazard insurance(homeowner's insurance).

9. Recording fees and tranfer taxes or fees.

10. Survey, if required by Lender.

11. Title Insurance Coverage for Lender.

12. Title Insurance Coverage for Owner. This one is important to remember because it is usually a Seller's expense.

It is very important to know what the allowable closing costs are for HUD properties for sale. If you put too much on Line 5 you will lose it.

For example, if the purchase price of the HUD house for sale was $100,000 and you put $3,000(3% of purchase price)on Line 5. If the HUD allowable costing costs only came to $2,000, you will LOSE $1,000.

Your real estate agent should be experienced in HUD properties for sale and HUD government foreclosure homes. Your experienced agent will make sure the right amount is in Line 5 of the Sale Contract.

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