All HUD contracts are valid for a specified number of days once it is approved and signed by HUD. That date will be provided to you upon your receipt of the executed contract. This does not mean they have to wait to close until that expiration date. As soon as our office is ready to close, the real estate agent and lender will be contacted to schedule a closing date and time. The only delay in that will be if there are title issues that have to be resolved before closing.
Earnest money will now be held by the Closing Agent. All earnest money funds must be sent to the AM with the contract package in the form of a cashier's/certified check payable to HUD. The AM will then forward the earnest money check to the closing agent when the contract is sent to them. The Closing Agent will hold all earnest money for closing.
If a transaction does not close due to financing or other reasons, the earnest money can be refunded to an owner occupant but a denial letter or statement of reason must be provided to our office before the expiration. If an investor fails to close, they will have to forfeit their earnest money. Also, a contract release/cancellation form must be completed on the appropriate AM form which can be found on their website.
*All cancellation determinations are on a case by case basis and the final decision will come from the Asset Manager not our office.
Closing Extension Request
If the closing does not occur on or before the expiration date, an extension must be approved by HUD. The real estate agent or lender will need to contact our office at least 5 days prior to the contract expiration to obtain the necessary forms that must be filled out. Extensions are given 15 days at a time. Extensions may be granted to owner occupant buyers at no charge if the reason is because of no fault from the buyer. In that case, the extension forms must be filled out and returned to our office before the expiration.
If the buyer is an investor, the extension money must be received by our office on or before the expiration date. The extension fee rates are listed on the extension forms provided by our office.
*All extensions are granted or denied on a case by case basis and that decision will come from the Asset Manager, not out office.