Posted by hk CA on November 19, 1998 at 13:09:40:
How do I cover myself with this HUD purchase? - Posted by Patrick
Posted by Patrick on November 18, 1998 at 07:17:02:
Just got a HUD home under contract of which I do intend to flip to a retail buyer after taking title. I was told as an investor that you must live in the house, or at least have the intent to live there. If I do decide to sell within two weeks to one month after settlement, how do I cover myself? I don?t want to dishonest so if there is no way of accomplishing this please let me know.
Re: How do I cover myself with this HUD purchase? - Posted by Tim Pannabecker
Posted by Tim Pannabecker on November 18, 1998 at 08:23:55:
If you intend on applying for a HUD owner occupied loan, HUD will want you to occupy the house. If you checked the investor box on line 8 of the HUD Sales Contract you have no obligation to occupy. Further, if you are going to flip “as is” HUD will typically allow you to assign your interest. I have been the winning bidder at HUD auctions and have advertised property before close of escrow. I know others who have flipped out of an excrow. My HUD requires that you ammend the sales contract and have them sign off - piece of cake.
Re: How do I cover myself with this HUD purchase? - Posted by phil fernandez
Posted by phil fernandez on November 18, 1998 at 08:20:00:
Did you sign an owner occupancy affidafit ? If you did sign one when you submitted your offer, HUD will expect you to live in the house for at least one year. That is what you signed.
It is my understanding that throughout that first year, HUD will verify that you are actually living in the house. Please note that verbage states 5 years and or a $250,000 fine for fraud. Don’t fool around with the government.
Now if you did not sign the owner occupancy affidavit and are buying as an investor you do not have to live in the house for the one year period. Depends on what you signed.
Not in my HUD’s backyard - Posted by Irwin
Posted by Irwin on November 19, 1998 at 06:59:36:
My HUD area office won’t permit the pre-closing flip. At least as of about 6 months ago. I’ll check to see if policy has changed.
Thanx-Tim and Phil - Posted by Patrick
Posted by Patrick on November 18, 1998 at 10:38:16:
Thank you very much for your timely response Tim and Phil.
I appreciate your answers. I did sign as owner occupant and was thinking about moving in but was clear on the flipping aspect of it. Just wanted to know my options. I am getting it(3/2 with hardly any repair) for 40% discount. Payments will be cheaper than what my current mortgage is.
One other question- how long do you have to reside in VA home after settlement as owner occupant? I bought my current home with VA financing three months ago. Can I sell now or do I have to remain in this home for a specified period of time.
Thanx again guys
Re: How do I cover myself with this HUD purchase? - Posted by Young Buck
Posted by Young Buck on November 18, 1998 at 08:29:42:
Im new at all of this but I have been looking at HUD lists for over a 1yr 1/2 and where I live (East Orange, NJ) the HUD list is divided into 2 parts 1. Owner Occupancy and 2.All Bidders…which means you do not have to live in the house…I am in the same situation as you except I dont have the money to purchase them…but I know a good “flip” when I see it…take a look at my “Would this work? Young Buck” article it talks about an idea for hud homes. Let me know what you think.
Re: Not in my HUD’s backyard - Posted by Tim Pannabecker
Posted by Tim Pannabecker on November 19, 1998 at 07:42:53:
Each HUD Region calls their own shots, but the
HUD Sales Contract (HUD-9548) states that the sales contract “… is assignable only by written consent of the Seller.” While this does not guarentee assignability it does intimate that it MAY be an option. Where I live they will allow a title vesting/Buyer change. Their policy is within 5 days of the contract signing, but they are flexible on the time frame due to the sheer volume that they must process (I have made changes 10-15 days later).
HUD does not have a national unified policy (and the policies often change), but this can be to your advantage. Some issues are not negociable but many are and many rules and procedures are flexible. The policy may state it one way, but HUD does attempt to assist people in the purchase process. This is quite an arguable statement as I have met several complete jerks at HUD, but I have had others assist me beyond the call of duty.