HUD Proof Of Funds

6 Replies

Working on my second HUD contract as both agent and buyer. Received a rejection that the proof of funds was in the name of my partner, not the company. We provided all articles of incorporation and an unanimous consent from board of directors stating that the company was authorized to purchase the property and procure funds for purchase from my partner. We used the same paperwork on the first HUD with no issue.

The listing broker had never heard of this before. Anyone else have any experience of how to deal with this, short of transfer funds which could not be completed before cut off.

@Ryan Beasley  

You are going to have to explain in more detail whats happening.

Who is the board of directors?

@Winston Spence

The company is myself and my partner only, so we are the board of directors as well.  We have always provided a letter from "board of directors" stating that I have the authority to sign solely for purchase of said property, signed by both of us. Both of us are listed as managing partners in articles of inc as well, which was provided.

Well, POF technically is "cash in an account In The Name Of The Buyer" (Not in the name of an officer, HML, etc). In this case, the name of the company. In this case should it matter...probably not, but they see a lot of POF's in a HML name or some such, so maybe they're just being a little too technical.

@Ryan Beasley  

I won HUD auctions before but I not too experienced with this.

My opinion, the first person who checked your documents must have missed that part. It looks like everything is in house meaning, you are the buyer, agent, LLC, and company which to HUD is pretty sketchy.

HUD probably wont approve of it again, think about it, your partner is showing proof of funds from the LLC that he is apart of.

I would try having someone buy the property with the funds of the LLC.

Best of luck!

Originally posted by @Winston Spence:

@Ryan Beasley

HUD probably wont approve of it again, think about it, your partner is showing proof of funds from the LLC that he is apart of.

 I am the selling agent not the listing agent. Would there be an issue with that?

Ryan, make sure that the name on the contract is the same as on the incorporation letters and the proof of funds. When I first started selling HUD Homes. There was several times I made mistakes on contracts or other papers and ended up letting the property go back to HUD. Then we bid on it again, and got the bid again.

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