What is HUD Guidelines 24 CFR 206.125?

Question

There is a 3/1 home for sale for a few thousand dollars in my target area.  Does this mean I have to pay 95% of the original mortgage held by the lender after the purchase?  The home is listed in foreclosure and was recently occupied.
Thanks!

Wayne Brooks · Answer

It applies for at least six months after being offered for sale as a REO.

Rich Hupper · Answer

Can someone tell me if this rule stays with a property forever or if the property never sells the ruling can expire?

Irina Finkler · Answer

This is a great thread. Thanks to everyone who answered here.

I  have a question though. I understand the offer amount on a property  under this guideline has to be 95% of asking price or higher.

But what about concessions? Can we ask for any amount of cash at closing for repairs?

Sean Cole · Answer

I have.  Generally, the only price that the seller can/will accept is list price.  I've paid less, but it's always been due to lucky timing where a price reduction was about to be posted or the agent processed a price reduction to meet my price.In terms of the closing process, it's just like any other purchase.

Rylan Spear · Answer

Any updates here? Has anybody successfully purchased a HUD property with HUD Guidelines 24 CFR 206.125???? I'm currently trying to figure out a purchase on a property like this.

Wayne Brooks · Answer

Depends on whether the listing price is the required price (95% of the FHA appraisal) or whether they put some wiggle room in it.

Helder Cristovao · Answer

Hi Chris,

A fellow Union Farmer!

I'm looking at one of these properties right now as well, in Middlesex County. Did you get anywhere with the one you looked at? Any additional information on if they take offers below listing price?

Thanks,

Helder

Chris Masons · Answer

I am actually going to see one of these properties hopefully tomorrow here in NJ.

From what I have gathered  Bnak has taken property back due to original mortgagee having a reverse mortgage and passing away.

The debt must be paid back to bank that lended the funds. And from what I am reading the price listed is final. no negociations at all.....

regards,

Chris

Mark Beekman · Answer

I'm resurrecting this thread for some clarification.

I'm looking at a property subject to these guidelines and I'm told that a Corporate addenda will apply once offer is accepted.

What exactly does this all mean? Just that they won't go below appraisal price?

Wayne Brooks · Answer

On reverse mortgages insured by FHA, which is the overwhelming majority, a lender must sell the property for at least 95% of the FHA appraisal in order to be reimbursed in full under their insurance from FHA.  These sales, which are short sales, are final...no assumptions of additional debt by the purchaser.