Listing and Bidding Procedures Index

Please select a topic from the list below:

• Disclosures
• Listing Codes
• Listing and Bidding
• Required Contract Documents
• Electronic Bid Withdrawal
• Down Payment
• Earnest Money Deposit
• Earnest Money Forfeiture and/or Return
• Closing Costs
• Closing Time Frame
• Closing Extension Policy
• Broker Registration
• Broker Commission
• Help

HUD Homes are sold "As Is" without warranty. 

Irregularities in bids: 
HUD reserves the right to waive any irregularity in any bid, reject any and all offers, and to withdraw a property prior to the bid opening.

Code and Zoning violations: 
Brokers should advise Purchasers that the properties may contain code and/or zoning violations. Code and Zoning status must be determined by the Purchaser. 

Property Condition: 
No guaranties and/or warranties made. No repairs will be performed by HUD after closing. Purchasers are encouraged to have the properties inspected by a qualified home inspection service company to satisfy themselves as to the condition of the property. 

Potential Purchasers:
Contact a HUD Approved Broker to obtain a copy of the current listings, to visit listed homes or to make an offer. 
HUD pays closing cost up to 5% of the purchase price, IF inserted on line 5 of the sales contract. 

You may obtain a copy of the "buyer's kit" on the Internet at
http://www.hud.gov/buyhudhm.html

Listing Codes

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IN - Insured: 
All properties listed as "INSURED" are eligible for FHA financing. All requests for insurance will be under Section 203(b) of the National Housing Act Program. An interest rate will be charged on the loan and is negotiable between the purchaser and lender. The mortgage may include some mortgage insurance payments.

IE - Insured with Escrow Repairs: 
Properties listed as "INSURED WITH ESCROW REPAIRS" means that certain repairs (not to exceed $5,000.00) are required to meet Minimum Property Standards for an FHA mortgage. Purchasers of these properties have the option to purchase "as-is" with cash or conventional financing. Or, these properties can qualify for FHA Section 203(b) mortgages if the purchaser and lender establish a repair escrow at the closing for the completion of repairs within 90-days of the closing.

UI - Uninsured: 
Properties listed as "UNINSURED" means that certain repairs and or improvements are required to be eligible for an FHA 203(k) mortgage. The required repairs on most of these properties exceed $5000.00. Purchasers of these properties have the option to purchase "as-is" with cash or conventional financing. These properties are also eligible for a FHA 203(k) mortgage if the required repairs and or the improvements are completed within 90-days of the closing.

IC- Insurable with Condition(s): 
Properties listed as "Insurable with Condition(s)" are properties having conditions which must be satisfied to fully meet FHA's Minimum Property Requirements. They are: 

• properties appraised without the benefit of the utilities being activated during the time of the appraisal, 
• properties with flat roofs, and/or 
• properties which appear to be insurable but a certification for a specific item(s) is required).

The mortgage lender/purchaser(s) must have a complete systems check, the flat roof inspection to assure a two year life, and any other certification needed to satisfy the appraiser's concerns listed on the Appraisal VC form performed by a reputable individual or firm at the purchaser(s) expense to ensure complete system functionality prior to loan closing.

After completion of lender/purchaser(s) inspection, the sales contract could be modified to reflect either an Insured (IN), Uninsured (UI), or an Insured with Escrow Repair (IE) sale in instances where lender/purchaser(s) provide sufficient documentation to support change in financing. Modification of the sales contract will only be effective if and only if it is signed by both Purchaser and Seller.

If repairs are required that do not exceed $5,000, the loan may be financed as a 203(b) repair escrow and the lender may process the loan using the instructions for cases with repair escrow. If repairs are required that exceed $5,000, the loan may be processed with Section 203(k) financing provided the cost of repairs are in compliance with REO program policies.

New listings are available weekly on Friday mornings.
During the Initial listing period, bids may be submitted by all potential purchasers (Owner Occupants and Investors).  Priority will be given to Owner-Occupant purchasers for the first 10 calendar days.

Owner Occupant Priority Period.
All Owner-Occupant offers received during the first 5 days of this 10-day period, shall be considered to have been received simultaneously.  In order to be valid for the 5 day priority period, bids must be completed and confirmed on the Internet no later than 11:59 p.m. on Tuesdays.

At 1:00 p.m. on Wednesdays, Owner-Occupant bids received through Tuesday at 11:59 p.m. will be opened and reviewed and the highest acceptable net bid to HUD will be selected.

Should there be no acceptable Owner-Occupant bids, the Owner-Occupant daily bids received for the remaining five days will be reviewed and posted daily at 1:00 p.m.

At each such daily bid opening, the highest acceptable net Owner-Occupant bid will be selected.

General Public Bid Period.
At the conclusion of the 10-day Owner-Occupant Priority Period, should the property remain unsold, all general public bids (including Investors) received during that 10-day period, will be reviewed and posted on Mondays at 1:00 p.m. and the highest acceptable net bid to HUD will be selected.
In the event the property remains unsold after these bid openings, daily bids received by 11:59 p.m. will be reviewed and results will be posted the next day at 1:00 p.m.

Bids received on the same day shall be considered to have been received simultaneously.

Friday, Saturday and Sunday bids will be reviewed simultaneously on Mondays at 1:00 p.m., and the highest acceptable net bid to HUD will be selected.

In the event the property remains unsold, the bids (Owner-Occupant and General Public) will be reviewed and posted daily at 1:00 p.m. and the highest acceptable net to HUD bid shall be selected.  This listing will remain in effect until the listing has been sold or withdrawn from the market to be reanalyzed.   Bids must be completed and confirmed before 11:59 p.m. in order to be valid for that day and will be opened the next day excluding Friday, Saturday and Sunday which will be opened on Monday.  Bids must be completed and confirmed on the Internet or Interactive Voice Response System (IRV) before 11:59 p.m. in order to be valid for that day.

HUD Approved Brokers will continue to show properties and prepare complete contracts.

Brokers should submit bids through Internet Electronic Bidding by one of two means:

• Internet Bidding at this web site,
• Interactive Voice Response System (IRV) at:

Brokers are required to review bid announcements to verify if their offer was the selected offer.  Within 48 hours after the announcements are posted, Brokers must submit the original written NEW HUD Sales Contract Form 9548 (1/99) along with all necessary addenda to:

To be acceptable, hard copies must contain no errors.

REMINDER:  Brokers must check the web site on a daily basis for available properties and bid announcements.  If your bid is selected, a completed contract (with the required Addenda) must be in our office within the next 48 hours of Bid Result Publication or it will be considered canceled and the second highest acceptable net bid to HUD will be selected.

SALES CONTRACT and REQUIRED ADDENDA:

• Fillable HUD Sales Contract Form 9548 Revision (1/99)
• Attach the following Addenda:
  • Lead Paint Addendum, if the property was built prior to 1978.
  • Notice to Purchasers Addendum when the offered amount exceeds the appraised value at the time the offer is submitted.
  • Certification of Owner-Occupant, if purchaser is an owner-occupant.
  • Inspection Addendum.
  • Radon Gas and Mold Notice and Release Agreement
  • Letter from a Financial Institution acknowledging that purchaser has funds available for downpayment.
  • Mortgage Pre-Qualification Letter from a lending institution, if the purchase is to be mortgaged, stating that an in-house credit check has been performed and the purchaser has been pre-qualified for a mortgage up to a specified mortgage amount.
  • Certification from a Financial Institution, if the purchase is cash, stating that funds are available on the day of closing.

To obtain an original NEW HUD Sales Contract Form 9548 Revision (1/99):

• Order the forms by calling 800-767-7468 or Fax your request on company letterhead to 202-708-2313,
• Contact the Broad Listing Broker (BLB) in your area,
• Contact our offices.

Certification of Owner-Occupant Status for Cash Purchases:  All bids by owner-occupants, who are purchasing properties listed in the owner-occupant category, must include an Owner-Occupant Certification.  Sanctions will be immediately imposed upon Brokers, Agents and Investors found to be abusing the system.

You may withdraw an electronic bid by sending us a fax, no later than 10:00 a.m. on bid opening day.
 

The message must include:

• the Broker's Name,
• Tax ID Number or SSN,
• the agent's name and telephone number,
• and key information concerning the bid:
  • Case Number,
  • Address,
  • and Bid Confirmation Number.
    

Owner Occupants Only:
   3% Minimum Down payment for FHA financed properties.
   Maximum mortgage amount 97% of the appriased value
   or sales price whichever is lower.

Investors:
  1 unit:  25% Minimum Down payment, for FHA financed properties;
  2 to 4 units:  15% Minimum Down payment, for FHA financed properties.

Required Earnest Money: (to be deposited in the Selling Broker's Escrow Account).
(Cashier's check or money order only)

• $1,000 for offers greater than $50,000;
• $500 for offers $50,000 or less,
• 50% of the Listing Price for Vacant Lots

The following provisions are applicable in all instances except those where HUD in unable or unwilling to close the sale, in which case the entire amount will be returned.

Investor Purchasers:

• Uninsured Sales: 100% of the deposit will be forfeited to HUD for failure to close, regardless of the reason.
• Insured Sales:
  • 50% of the deposit will be forfeited to HUD for failure to close if the purchaser is determined by HUD to be an unacceptable buyer.
  • 100% of the deposit will be forfeited to HUD if the sale fails to close for any other reason.

Owner-occupant Purchasers:

Return 100% of the deposit when:
• There has been a death in the immediate family (purchaser, spouse or children living in the same household).
• There has been a recent serious illness in the immediate family that has resulted in significant medical expenses or substantial loss of income, thus adversely, affecting the purchaser's financial ability to close the sale.
• There has been a loss of job by one of the primary breadwinners, or a substantial loss of income through no fault of the purchaser.
• For an FHA insured sale, HUD (or a D.E. underwriter) determines that the purchaser is not an acceptable borrower.  For an uninsured sale, the purchaser was pre-approved for mortgage financing in an appropriate amount by a recognized lender and, despite good faith efforts, is unable to obtain mortgage financing.  "Pre-approved" means a commitment has been obtained from a recognized mortgage lender for mortgage financing in a specified dollar amount sufficient to purchase the property.
• There is other equally good cause, as determined by CitiWest / BestAssets-CitiWest, in keeping with the spirit and intent of the above policy.

Return 50% of the deposit when:

For an uninsured sale, despite good faith efforts by the purchaser, there is an inability to obtain a mortgage loan from a recognized mortgage lender.

Forfeit 100% of the deposit when:

• No documentation is submitted.
• Documentation fails to provide an acceptable cause for the buyer's failure to close. 
• Documentation is not provided within a reasonable time following contract cancellation.

Vacant Lot Sales:

The purchaser is considered to be an investor and instructions pertaining to investors will apply.

HUD pays certain Closing Costs up to 5% of the purchase price, IF inserted of line 5 of the sales contract.
Click here to view HUD Notice H-2003-02 explaining which closing costs are allowable and the maximum amount in your appropriate State.

• All purchasers must close on or before forty five (45) days of contract acceptance date for all bids submitted on or after October 1st, 2004 for all six New England States.
• All purchasers must close on or before sixty (60) days of contract acceptance date for the states of Alabama, Georgia and Mississippi.

ALL SALES ARE EXPECTED TO CLOSE WITHIN THE APPLICABLE TIME FRAME IDENTIFIED ON LINE 9 OF THE SALES CONTRACT.

Closing Extension Request:  If the closing does not occur on the specified date on line 9 of the HUD Sales Contract 9548, the Broker should contact HUD's Closing Agent at least two weeks prior to that date to request an extension.
CitiWest, as HUD's Representative, may grant an extension of closing time and, if approved, each extension will be for a period of fifteen (15) days:

• Submit the "Request For Extension of Closing Date" (Extension Request form) and all the required supplemental supporting documents to HUD's Closing Agent prior to the expiration of the sales contract.

• Documentation submitted with the extension request must establish that a closing can reasonably be expected to occur within the extension period.

• The extension request must be accompanied by a cashier's check, money order or other certified funds in the amount of $150.00 made payable to HUD.

• The initial 15-day extension will be provided for owner occupant purchasers, at no cost, if documentation is provided indicating that proper and timely loan application was made, that the delayed closing is not the fault of the purchaser and that mortgage approval is imminent.

• The $150 ($10 per day for a 15-day extension) is an extension fee and will be retained by HUD.  In the event that the purchaser closes prior to the end of the extension period, the unused, prorated portion of the extension fee will be credited to the amount due at closing.

• The approval of an extension does not obligate CitiWest / BestAssets-CitiWest, as HUD's Representative, to grant future extensions.
  

Broker Registration and NAID Number:  You must be a HUD Approved Broker and have a valid NAID Number (previously supplied by HUD) before performing Electronic Bidding.

If the Selling Broker is not a HUD Approved Broker and wants to submit an electronic bid, you will need to complete Forms SAMS 1111 and SAMS 1111-A and return them to the appropriate CitiWest / BestAssets-CitiWest before an electronic bid can be made.  These forms can be downloaded from http://www.citiwestinc.com/forms.html.

Broker Commission

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Broker Commission:  Up to 5% commission of the purchase price to the Selling Broker, IF inserted on line 6a. of the new HUD sales contract Form 9548 (1/99).

Broad Listing Broker Fee:  MUST be inserted on line 6b. of the new HUD sales contract Form 9548 (1/99):

"WHAT IF I NEED HELP?"
If you need help, you can obtain it several ways:

• There will be an on-line help screen.  It provides complete instructions for filling out the HUD sales contract, and shows the corresponding input for items required for submission.  You will be able to access this document from the Internet at the appropriate State Bidding Screen, or click on a numbered item on the bid submission screen.
• You can also call, during the hours of 8:00 a.m. through midnight eastern time: