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Click Here for MS Word version of this Notice U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT WASHINGTON, D.C. 20410-8000 OFFICE OF THE ASSISTANT SECRETARY FOR HOUSING-FEDERAL HOUSING COMMISSIONER Special Attention of: All Homeownership Center Directors Notice : H 2003-02 All REO Division Directors Issued: March 5, 2003 All Real Estate Owned Branch Chiefs Expires: March 31, 2004 All Management and Marketing Contractors All HUD Contract Closing Agents Cross References: Subject: Allowable Closing Costs Paid by HUD Single Family Property Disposition This Notice supersedes Notice H 2001-13 which identified allowable closing costs paid in connection with the sale of a HUD-owned single family property. The effective date of this Notice is 30 days from the date of issuance. The allowable closing costs identified below will be in effect for sales contracts executed on or after the effective date of this Notice. Sales contracts executed prior to the effective date will be held to the allowable closing costs identified by Notice H 2001-13. In an effort to ensure that purchasers, real estate brokers and/or sales agents, HUD's management and marketing contractors, and HUD's contracted closing agents are provided with consistent information, the following list distinguishes closing costs that are automatically paid by HUD and those which may be paid if amounts are indicated on Lines 5 and/or 6a and 6b of the Sales Contract. Closing costs automatically paid by HUD * Broker's Sales Commission Amount stated on Line 6b of form HUD for Broad Listing Broker 9548, Sales Contract * Proration of property taxes and any special assessments such as Homeowner's Association (HOA) fees and utility bills * Condominium or HOA Transfer Fee, if applicable _________________________________________________________________ HSIP: Distribution: W-3-1, W-2(OGC)(H)(Z), W-3(A)(H)(ZAOO), W-4(H), R-1, R-2, R-3, R-3-1(H)(RC), R-3-2, R-3-3, R-6, R-6-1, R-6-2, R-7, R-7-1, R-7-2, R-8, R-8-1 * Cost to provide condominium documents to purchaser * Repair Escrow Fee of $200 where applicable * Settlement or Closing Fee: The Department will pay HUD's closing agent. This is the purchaser's cost if another agent is chosen. * Recording Fees: HUD will automatically pay recording fees and charges for the deed (i.e., nominal amount charged per page for recordation). Closing costs that may be paid by HUD. Purchasers may specify a dollar amount on Line 5 of form HUD-9548, Sales Contract that they expect the Department to pay towards their financing and closing costs. HOC REO Directors have the flexibility to prescribe the maximum amount of the closing costs that HUD will pay on line 5, which may range from three to five percent of the purchase price. HUD will pay the lesser of the amount requested in Line 5 or the actual costs of the items specified. Any funds remaining after the allowable closing costs have been paid will not be credited to the purchaser(s) at sales closing. Sales commission for the selling broker will be paid by HUD, only if indicated on Line 6a of form HUD-9548, Sales Contract. The following list represents the complete list of additional allowable closing costs that may be paid by HUD at sales closing if there are sufficient funds on Line 5 of form HUD-9548, Sales Contract to cover the expenses: * Appraisal Fee: HUD will pay for the Appraisal on an FHA 203(k) loan that is necessary to determine the "after rehab" value. HUD will pay for appraisals that expired prior to Sales Contract execution. * Credit report: Up to $20 * Flood Certification: If the property is being offered with FHA insurance, is on a Flood Plain, HUD will pay for Flood Certification. * Home Inspection (includes testing for lead based paint, radon, mold, etc.) * Homeowner's Warranty: The following table represents the amounts that will be paid.
State |
Maximum Cost |
State |
Maximum Cost |
||
|
Paid by HUD |
|
Paid by HUD |
||
Alabama |
$375 |
Montana |
$350 |
||
Alaska |
$400 |
Nebraska |
$415 |
||
Arizona |
$300 |
Nevada |
$300 |
||
Arkansas |
$385 |
New Hampshire |
$350 |
||
California |
$300 |
New Jersey |
$425 |
||
Colorado |
$350 |
New Mexico |
$325 |
||
Connecticut |
$650 |
New York |
Not Paid by HUD |
||
Delaware |
$300 |
North Carolina |
$225 |
||
District of Columbia |
$350 |
North Dakota |
$360 |
||
Florida |
$325 |
Ohio |
$250 |
||
Georgia |
$399 |
Oklahoma |
$399 |
||
Hawaii |
$300 |
Oregon |
$350 |
||
Idaho |
$400 |
Pennsylvania |
$385 |
||
Illinois |
$400 |
Puerto Rico |
$325 |
||
Indiana |
$400 |
Rhode Island |
$225 |
||
Iowa |
$350 |
South Carolina |
$225 |
||
Kansas |
$385 |
South Dakota |
$400 |
||
Kentucky |
$400 |
Tennessee |
$400 |
||
Louisiana |
$399 |
Texas |
$325 |
||
Maine |
$375 |
Utah |
$250 |
||
Maryland |
$200 |
Vermont |
$300 |
||
Massachusetts |
$600 |
Virginia |
$360 |
||
Michigan |
$250 |
West Virginia |
$255 |
||
Minnesota |
$400 |
Washington |
$350 |
||
Mississippi |
$445 |
Wisconsin |
$345 |
||
Missouri |
$385 |
Wyoming |
$350 |
* Loan Discount Points: Up to three percent to buy down the rate, with certification from lender. * Loan Origination Fee: Up to 1 percent will be paid on Conventional/FHA mortgages; up to 1.5 percent will be paid on FHA 203(k) mortgage. * Prepaid and Escrow Items for Owner-occupant Purchasers Only * Recording and/or Transfer taxes or If, under state or local fees. (i.e., amounts charged as a law, the recording fees Percentage of value) and/or transfer charges or taxes are imposed on the Seller (i.e., HUD), then HUD is immune from paying these charges and will not pay them. If however, the charges are imposed on the purchaser, HUD may pay these charges on behalf of the purchaser if funds remain in line 5. Please consult with HOC counsel for additional information. * Survey if required by lender. * Title Insurance Coverage for Lender. * Title Insurance Coverage for Owner. The above represents the complete listing of allowable closing costs in conjunction with the sale of properties owned by the Department. If you have any questions, please contact Wanda Sampedro of the Asset Management and Disposition Division at (202) 708-1672. ____________________________________________ John C. Weicher Assistant Secretary for Housing- Federal Housing Commissioner 4
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