Subject to deal with Hud Loans

Austin, Texas
Creative Real Estate Financing
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Subject to deal with Hud Loans

Minh Vu
Rental Property Investor · Austin, TX · Member since 2021 · 3 posts · 0 votes

I am looking into a subject to deal but it has 3 HUD loans. I talked to the person selling the contract and they mentioned that those hud loans have to be paid at year 2051 or if you sell or refinance the house.

In the meantime there is no interest or monthly payments on those HUD loans. Is this true?

the loan balance is 155k and it shows on the mortgage statement but there are 24k worth of HUD loans which the total unpaid balance is around 175k

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Nicholas L.Pro Member
Flipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ votes
2y

@Minh Vu

if you have to ask random people on the Internet... pass

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  • Nicholas L.Pro Member
    Flipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ votes
    2y

    @Minh Vu

    if you have to ask random people on the Internet... pass

    1Reply
  • Tom S.
    Real Estate Investor · Burlington, VT · Member since 2010 · 2k+ posts · 1k+ votes
    2y

    @Minh Vu  You need to look at the mortgages to see the exact terms.

    I'm assuming the value of this property is far greater than $175k, which is why you're pursuing this?  Can you post the numbers?

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  • Account Closed
    Investor · Member since 2024 · 4 posts · 0 votes
    2y

    Get an authorization to speak to the lenders from the borrower and contact the lenders.  Request a beneficiary statement.  This will give you what you need to determine loan payoff.  

    Then request a prelim from from title and you’ll have most of the financial info needed 


    good luck 

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  • Cameron GreenPro Member
    Real Estate Agent · Cleveland, OH · Member since 2023 · 73 posts · 46 votes
    2y
      • If the seller mentioned that the HUD loans have no interest or monthly payments, this might be accurate for certain specialized HUD programs or subsidies. However, this is less common for standard FHA loans. You should verify this with official HUD documentation or through a HUD-approved lender.
    2. Term Until 2051:
      • The mention of the loan term extending to 2051 or until the property is sold or refinanced suggests these could be loans with a long-term structure or special conditions. HUD loans sometimes have specific conditions related to repayment or subsidies that might affect how they are handled.
    3. Balance and Unpaid Amounts:
      • The discrepancy you mentioned between the mortgage statement and the HUD loan amounts might indicate deferred principal or accumulated balance under specific conditions of the HUD program. This might be due to subsidy or assistance programs where payments are deferred or not required under certain circumstances.
    1. Verify Loan Terms:
      • Contact the lender or servicer handling the HUD loans to get a clear understanding of the terms, especially regarding interest, payments, and any special conditions tied to these loans.
    2. Consult a Real Estate Attorney
      • Given the complexity of dealing with multiple HUD loans and the potential implications for your "subject to" deal, consulting a real estate attorney or a knowledgeable real estate professional is highly recommended. They can help ensure that you fully understand the terms, any potential risks, and the implications for your investment.
    [email protected]216-644-9728
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  • Minh Vu
    OP
    Rental Property Investor · Austin, TX · Member since 2021 · 3 posts · 0 votes
    2y

    Thanks everyone for the help. Here are the numbers and info about the HUD loans

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  • Minh Vu
    OP
    Rental Property Investor · Austin, TX · Member since 2021 · 3 posts · 0 votes
    2y

    Purchase price is 200k 

    loan balance is 155K on mortgage statement but with the HUD loans it would add up to 177k including entry fee that would put PP at 200k


    Technically they are saying I'm only paying on the 155k the other remaining HUD loan that equal to 24k that is paid 2051 or when refinancing or selling this house

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  • Joe S.Pro Member
    Investor · San Antonio · Member since 2020 · 3k+ posts · 3k+ votes
    2y
    Quote from @Minh Vu:

    Purchase price is 200k 

    loan balance is 155K on mortgage statement but with the HUD loans it would add up to 177k including entry fee that would put PP at 200k


    Technically they are saying I'm only paying on the 155k the other remaining HUD loan that equal to 24k that is paid 2051 or when refinancing or selling this house

    Who is the lender/note servicer that services the loan on behalf of HUD?

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