Information about HUD low income loans (appraisal, negotiating, mortgage, fees)

[lae60]

Hello,

my mom has a rental property that she will be selling to the current renter. The renter has actually rented the house for 43 years now. The house is in an area where the County offers HUD low income loans. The renters have gone through the 'training' offered by the County and the counseling class. The house in its location qualified for the program. The renters will qualify after they pay off a loan that will be paid off next Spring. The counselor said the wait until 2 months after the last loan payment to make sure everything is clear then formally start the process. Mom is willing to wait to sell the house until then as the renters do want to buy t and are older and do not want to move from the house they raised their kids in, etc. and they have been good renters throughout the years, always communicated and tried hard.

Mom did have the house appraised and will sell it for the appraised value, knowing that the housing market will go up between now and June / August when they will actually buy the house. She wanted to give them a number they could use in their counselling class and with their retirement income.

So, with it being a HUD loan we know it should be in excellent condition. So, mom is replacing the flooring, redoing a closet, replacing the dishwasher, upgrading some of the plumbing features, new fire and CO2 detectors, and resealing the driveway. She had a new roof put on and exterior paint 2-3 years ago. Kitchen cabinets were replaced a few years back. The water heater is already strapped. Is there anything else that HUD loans are known to look for? The house is one story, no steps, front porch and back patio, yards and detached garage.

Also, mom was wondering how much the closing costs are for HUD low income loans...obviously they changes with the house, but is there anything specific that she should expect? Or can someone give a general idea of what typically comes up on the closing costs?

The HUD counselling was just for the buyer, not mom, so I am just trying to help her and she wants to have it go smoothly. I never sold a house with HUD involved, just regular loans.

[LifeIsGood01]

Hud does not offer loans, the buyer has to find their own loan usually thru an FHA lender. Hud offers programs such as $100 down payment for some homes and their are programs to help with down payment and closing cost assistance, but some are state, some are federal and some have local components where if you buy in a city they apply but a mile one way or the other and a county program has to kick in.

[mawipafl]

Originally Posted by lae60

...
Also, mom was wondering how much the closing costs are for HUD low income loans...obviously they changes with the house, but is there anything specific that she should expect? Or can someone give a general idea of what typically comes up on the closing costs? ...

With FHA loans, most of the closing costs have to be paid by the buyers/borrowers. There was a time when certain costs were non-allowable for the buyers/borrowers meaning that the seller had to pay them. But that's changed. It appears that now the only fee a seller usually pays is the tax service, but apparently it's a-ok for the buyer/borrow to pay it.

What Fees Does the Seller Have When Selling to Someone With an FHA Mortgage? | Home Guides | SF Gate

The biggest expense for a seller accepting a FHA loan purchase has to do with the FHA appraisal. FHA inspections and appraisals are more strict and picky and, as far as I understand it from experience, all repairs must be done and paid for by the sellers. There can be no negotiating as there can be with conventional loan purchases.