All Forum Posts by: Noreen Eddy

Wow, tricky! I am a HUD O/O, and here to tell you that no one ever came to my house to make sure I've been living here. If you've paid cash, also.... I can't see how much they can really do to you. Also, I am pretty sure the O/O means 6 months out of a year (or maybe that's a Homepath rule?). So you might be fine!

Wow, tricky one.  Did the contractor back out after closing?  There is probably language in his contract that he actually can’t do that.  I’d be careful of doing the work yourself because if the bank still thinks the contractor is doing the work, and he/she submits request for release of funds, the money goes straight to the contractor and not to you.  If you get a new contractor, I think they have to re-submit all the estimates, etc.  

203k (not sure how 203b works) was how we got our house, and yes, it was amazingly frustrating to wait on a licensed/insured contractor to spackle and lay down 10sq ft of laminate, among other things. Keep in mind you do NOT need a "HUD licensed" contractor - you just need any licensed & insured contractor willing to put up with the paperwork.

Yes, all the fees come out of the bid, except for closing costs.  Absolutely double check the facts.  Scour those contracts with a fine-tooth comb.  Especially the fine print.

Hey, congrats on winning the bid!!  Woop woop!

@Craig Carter a 203k FHA has PMI. Ours was over $200 per month on top of the mortgage payment. That adds up quickly and is a royal PITA. If you refi into a conventional (presumably after improving the property), you can likely increase the value of the house and have sweat equity working for you - and then you get into a conventional without any extra money out of pocket.

I agree with @Bruce Lynn.  Fraud= bad.  Fraud against government = orange jumpsuits.  

If it means that much to you, take it to HUD and consistently follow up with them. I am an OO in a hud home and can't say anyone ever checked up on us...it is definitely a faulty system, that's for sure.

Personally I'd find a cash source, get the condo in your possession, screw HUD/FHA, and finance into a conventional once it's closed and you have the title. Having personally lived through a streamline owner occupant 203k...the object of the game is to get the house out of HUD and FHA hands as fast as possible.

If your bid is too low, you simply won't win.  Then it goes back on the market the next day (assuming no one else bid enough), and you can bid again.  At least that's what my understanding is.  

You're bidding against a computer. It all depends on what HUD has set as its minimum number.

Also, keep in mind, 9% (I think) goes to agency fees - so HUD is only keeping 91% of whatever you offer. Numbers games! Fun!

As I recall, the documents we signed on our HUD owner-occupied stated that falsification of anything on the contracts could result in hefty fine and imprisonment. (The federal kind of imprisonment).

So, unless the thought of wearing a 24/7 orange jumpsuit next door to the guy who hit Whitey Bulger sounds good to you... I'd play along with the rules.  With the government being so erratic lately on which rules they will enforce, it's a rule I personally wouldn't challenge.  

That being said, "owner occupant" means only for a year. A year is not that long when fixing a HUD property (trust me, it flies). Occupant means six months and a day per year, as I understand it.

Ooooo baby HUD + Lead paint = fun!

If I were you, and if I had the property under contract, I'd get my own test done while doing inspections, just to have a second opinion on it. HUD, as well as most government agencies, operate under "freak out" for things like lead paint, mold, asbestos, etc. because they really, really, really want to cover their a**es.

Our experience: "Any lead that is chipped, cracking, or peeling must be abated." With our 203k we were entitled up to $4k (I think) reimbursed for lead paint abatement costs. Our estimate cost for abating was $2800. The HUD agency (Sage Acquisitions at the time) provided paperwork stating $2800 would be reimbursed. All parties signed it. Morning of closing day, they decided it was $2300 instead, with no proof, no paperwork, no nothing, and we could either delay closing and backtrack to re-inspections, or just close.

We opted just to close, gave them a mental middle finger, and our mortgage broker felt so bad that he deducted $200 from his costs. Moral of the story: bidding on HUD houses is like playing the computer in chess: right or wrong, the computer often wins something.

Win some, lose some, but we got the house in our hands - with HUD homes we learned that can be the hardest part. Our philosophy became GET THE HOUSE, and deal with it later.

Hope this helps!  

@Darrell Bratton @Wayne Brooks Right-o! I think the owner occupant rule depends on the property! My hubby and I live in one that was owner occupant/agencies bidding only - but that was only a 5-day period, not 21 day. Every property is different, and keep in mind - like playing the computer in a chess game - HUD will often change the rules as they go.

We found that owner occupant helped us beat the pack in a competitive area (we're right outside NYC) - but it's not as crucial in less dense areas and/or for really ugly duckling properties.  

Happy hunting!