HUD homes activating utilities for inspection or apprasials

5 Replies

I'm curious to hear other people's experience getting utilities activated for inspections or appraisals on HUD homes while under contract. Any tips or tricks? Your experiences?

@Shelby Ek Do you need to activate the utilities in order to qualify for the loan you are getting?

The process requires some knowledge from your agent. Do they have experience selling HUD homes?

First- The PCR and Disclosure form will indicate whether it is permissible to turn on the utilites. If there are any known issues(even as simple as a bad $7 shutoff valve) you will not be permitted to turn on utilities. If you are getting a loan, this could be an issue so contact your lender asap for a possible work around. This issue alone kills many HUD deals

Your agent must fill out the request form and deliver it to the FSM with the required $$$ to de-winterize.  Keep in mind if approved, you will only be able to turn on once for a max 72 hours so coordinate the appraiser if applicable

You bare all the costs of turn on and turn off costs with the utility companies. If they require an inspection, keep in mind you will not be able to fix any issues as it is a federal crime to alter a HUD home in any way

So in summary, it can be a very difficult and costly process to activate utilities and in many cases not possible

Completely agree with @Greg H.  

It is very important to work with an agent that has closed HUD deals.

@Michael Noto yes I need utilities turned on for the appraisal.  I've asked lender multiple times if there is any way to avoid it and they answer is a consistent NO.

I figured I should post how this turned out for anyone else who is in my situation. I was able to convince my lender to allow me to do an air pressure test of plumbing lines, it passed and so I provided that info to the lender and they accepted it in lieu of turning on water. The lender also insisted on 20% down instead of the 5% I was hoping for. Luckily this was a super cheap property so I could afford the additional down payment.

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