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©2011 FirstPreston HT. This document includes data that shall not be duplicated, used or disclosed - in whole or in part - for any purpose other than to evaluate the information in this document .


HUD M & M III

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Section 1

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• Intro to M&M III• HOC Regions• Broker Registration



HUD Basics

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• HUD has awarded contracts to several companies to serve as Asset Managers (AM) and other firms to serve as Field Service Managers (FSM).– FSMs are responsible for property maintenance

and preservation and getting the properties ready for market

– AMs are responsible for the marketing, sale and closing of the HUD homes



HUD Basics

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• The purpose of the structure is to:– Increase the effectiveness of HUD’s asset

disposition program

– Foster competition among the contractors thereby improving responsiveness, reducing risk and increasing net returns to the agency



Home Ownership Centers (HOCs)

5Home Ownership Center Location



Atlanta HOC Regions

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Denver HOC Regions

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Philly HOC Regions

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Santa Ana HOC Regions

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Broker Registration



NAID Number

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• What is it?– Name Address Identification Number– Assigned to the Broker of Record for the agency– Must have a NAID number to place offers on a HUD home

• Do I have one?– Only Issued to the Broker Of Record– Check www.HUDHomeStore.com

• How can I get one?– Go to www.HUDHomeStore.com

http://www.hudhomestore.com/

http://www.hudhomestore.com/



NAID RegistrationSelling Brokers, Nonprofits, or Government Agencies

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• You can make an offer on a HUD Home only if you have a HUD Name Address Identifier (NAID). – To apply for a NAID complete forms – send to HUD– To change the information that displays on "Find a

Broker" search page, complete these same forms - submit to HUD

– Complete forms - send to the HUD office for your area



NAID Registration

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Click on NAID Registration



Principal Broker Instructions

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• Prior to registering as a broker or seller on HUD’s listing site, a NAID must be obtained from HUD

• Once a NAID has been obtained, principal broker must register as such using the NAID given

• Principal Broker registers before any of their agents or brokers

• Agents and associate brokers of same company register after the principal has been established, using the same NAID

Registering on HUDHomeStore.com



Principal Broker User

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• Go to HUDHomestore.com• Click on “Bidder” Link



Selling Agent User

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• Selling Agents and Associate Brokers of the same company must register after the Principal has been established, using the same NAID

• Selling Agents will follow the same process as the Principal Broker to register for their Selling Agent account



Section 2

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• Bidding Time Line• Brokers/Agents• Submitting an Offer



Bidding Time Line

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Exclusive “Owner Occupant” Period

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• Properties eligible for FHA financing (IN or IE)– A 30 day exclusive listing period for Insurable and

Insurable with Escrow properties.

– There is a 10 day bid period (within the initial 30 days) for all bids to be received. If no offers are accepted, bids are reviewed daily (up to 20 days) for owner occupant purchasers only.

– If there are no acceptable offers, bids are opened daily for all purchasers.

*Must Live in the House for 12 Months / *May Not Purchase as O/O for 24 months



Exclusive “Owner Occupant” Period

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• Properties not eligible for FHA 203B financing (UI)– For uninsurable properties there is a five day exclusive

Owner Occupant period.

– After the five day exclusive bid period, bidding is open to all purchasers on a daily basis (if an acceptable owner occupant offer was not received).

*Must Live in the House for 12 Months / *May Not Purchase as O/O for 24 months

Before going to General Bidding – all IN/IE properties located in revitalization areas, and some UI properties are offered in a special 7 day lottery bidding

period



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Real Estate Agents and Brokers



• LB’s are subcontracted by the AM’s and are responsible for listing and marketing HUD properties and serve as the “eyes and ears” for the AM’s

• Among other things, LB’s will place properties in the MLS and provide signage on each HUD listing

• Commissions are determined by the AM, with a maximum total of 6%

• If you are interested in becoming a Listing Broker you must contact the Asset Manager in your region to receive information, as this is not a function of HUD.

Listing Brokers

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Selling Brokers

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• A selling broker may earn up to 3% commission, but may also choose to reduce their commission to increase the net to HUD

• Commission checks are made out to the brokers name and address as it is registered

• Selling brokers are responsible for understanding HUD contracts and the entire HUD sale process. You must be able to properly inform and assist your buyer throughout the entire transaction



• Brokerage commissions• Maximum of 6% Commission• Listing Broker Commission is 3%• Selling Broker Commission is up to 3% (negotiable

between Selling Agent/Broker and Buyer• “Hard to Sell” Commission• If a property is designated as a “hard to sell” property,

a minimum commission is put in place• Fixed $1,250 Listing Broker Commission • Maximum $1,250 selling broker commission (selling

broker can reduce their commission)

Commissions

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Submitting an Offer

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Go to www.HUD.gov/HUDHomes

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http://www.hud.gov/HUDHomes



Bidding on a Property

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• Click on “Addendums”

• Access/Download– Contract Package– Welcome Home Flyer– PCR– LBP (Homes built prior to 1978)– Property Condition Summary




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• Select Submit an Offer




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• Select NAID Type




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• Enter NAID Number• Enter Real Estate

License Number• Enter Security

Code• Click “Verify

NAID” Button

The License must be for the same state in which property is located NOTE:



Section Three

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• Home Inspections• Earnest Money



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Home Inspections



Should Buyers Get Home Inspections?

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• All HUD homes are sold “As-Is”

• HUD does not warrant the condition of its properties and will not pay for the correction of defects or repairs

• Since the new owner is responsible for making needed repairs, HUD strongly urges a professional inspection once the contract has been executed by the seller



Inspection Process

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Takes place after the sales contract has been executed

Selling agent completes inspection request form (which is sent along with a copy of the executed contract)

Submits it to the appropriate FSM officeSelling Agent works with the FSM to obtain permission to for

utilities to be activated and submits deposit and/or re-winterization fees. Coordinate with FSM for collection of these deposits, utilities and other timing issues.

The FSM only allows utilities to be activated if the property does not require repairs to activate utilities and it is safe to do so

HUD will not pay for repairs indicated in the inspection - buyer is strictly prohibited from making repairs on the property until after closing



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Earnest Money



Earnest Money May vary from AM to AM

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• Earnest Money Deposit - Made Payable to HUDMay vary from AM to AM

– $500 for $50,000 or Less (certified funds only)– $1000 for $50,001 or More (certified funds only)

If Contract and Earnest Money is not received within 2 business days offer my be cancelled and back-up bidder may be notified or the property may be re-listed on the market.

Earnest Money MUST be sent with the contract package to the appropriate Asset Manager office location



Section Four

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• Successful Closing



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Extension Requests



Extension Requirements

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• Extensions of Escrow Due Date– Time to close is 20 - 30 days for cash and 30-45 days for

any financing (depending on HOC area)– File Extension with Closing Agent– Submit Extension Request Form, Fees and letter from

the Lender

Sales Price Extension Fee

$25,000 or less $150 ($10.00/day)

$25,001 - $50,000 $225 ($15.00/day)

Over $50,000 $375 ($25.00/day)



Next Steps to Closing Ratified Contract

• Signed contract sent to Closing and Selling Agents

• HomeTelos forwards earnest money to Closing Agent

• Selling Agent receives appraisal and Closing Agent contact information

• Provide the Lender with a copy of the ratified contract

• Order the buyer’s title policy

• Request Home Inspection

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Additional Resources

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• The bidding site (www.hud.gov/hudhomes) has a wide variety of frequently asked questions and has also recently updated the site to add training videos.

• Brokers can access these videos by pressing the FAQ link at the far right of the menu bar at the top of the web site’s home page.

All offers are submitted through

HUDs web site, not the individual AM web

sites.