Embedded Files
U.S Department of Housing and Urban Development (HUD)
Closing Instructions
The following are general settlement instructions and do not provide all specific instructions for sales under
special programs.
FHA CASE NO.: DATE OF HUD’S OWNERSHIP:
PROPERTY ADDRESS:
BUYER(S) NAME:
AMOUNT OF DISCOUNT BUYER RECEIVED: %
AMOUNT OF UTILITY PAYMENT DUE: $
As settlement /title company/agent, you must adhere to the following closing instructions to close this sale
between the US Department of Housing and Urban Development (HUD) and the buyer identified on the
attached executed sales contract. If you are unable to perform these tasks within the required time frame
(as defined on line 9 of the HUD From 9548), please notify the buyer’s Real Estate agent immediately.
As the settlement agent/title company, you must meet all applicable local, state and federal standards. (See
HUD’s “Standards for Acceptable Closing Companies” contained in this document)
You must close this sale for only the buyer(s) identified on the executed sales contract, or
amendment/addendum which has been executed by the buyers and HUD’s delegated Asset Manager.
EARNEST MONEY: MMREM will forward the Earnest Money to you within 2 business days of contract
execution.
REAL ESTATE TAXES: Real estate taxes for the current year shall be pro-rated to the date of closing. HUD
will only pay for taxes currently due and will not pay or reimburse any party after closing if real estate taxes
are reassessed by local government. The last payment amount of
$ , which covers the following period of time: .
HOMEOWNER ASSOCATION (HOA) FEES/DUES: HUD will pay for HOA fees/ dues pro-rated from the date of
HUD’s ownership to the date of closing. HUD will only pay for HOA fees/dues that are the legal
responsibility of HUD during its ownership in accordance with State statutes. The last payment was made
on in the amount of $ , which covers the following period of time:
to . (Name of HOA if applicable/available: )
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RENTAL MONIES: You shall verify with the Asset Manager (MMREM) that all rental monies due HUD have
been collected outside settlement if the buyer is an approved HUD tenant. If any due amounts have not
been paid, you shall ensure such payment is made at time of closing.
SPECIAL PROGRAMS: HUD has a number of special programs, including the Good Neighbor Next Door
(GNND) Sales program, in which the buyer receives a discount off the purchase price, as indicated on the
executed sales contract. Such discounts are to be reflected of Line (507) of Form HUD-1, Settlement
Statement.
Further, some sales such as those under GNND require a second Note and Deed of Trust/ Mortgage
and/or a Land Use Restriction Addendum. If applicable to this sale, special instructions for the
completion of those documents are attached or will be supplied by MMREM. For any question
about this you can contact Bob Maloney at 267-460-0651 ext. 324
For properties covered by an Asset Control Area (ACA) Agreement, the Asset Manager, will provide
additional closing instructions. For any question about this you can contact Bob Maloney at
267-460-0651 ext. 324
CLOSING COSTS: HUD will pay up to the amount on Line 5 of the executed sales contract, or up to 3% of
the sales price, whichever is less, towards reasonable and customary closing costs and the amount shall
be annotated on the HUD 1 in accordance with RESPA. HUD will NOT pay any portion of the transfer tax
unless there is money available in closing costs. Any unused portion will be credited to HUD’s
proceeds. (Customary Loan Origination Fee is up to 1% of the mortgage; 1.5% on a 203(k) loan)
Buyer Select Closing Fee: The purchaser is primarily responsible for any and all closing fees up to the
maximum allowed per State Law and Regulatory requirements. The buyer may apply amounts listed on
line 5 of the sales contract for payment of closing fees.
Recording fees for the Special Warranty/Grant Deeds transferring ownership from HUD to the buyer as
stated on the executed sales contract, for the second Note/ Deed of Trust, if required for special HUD
programs, and for special addendums, if required, such as Land Use Restriction Addendum, are the
expense of the buyer. This expense may be covered from funds on Line 5 of the executed sales contract.
If the buyer did not request funds on line 5, the amount to cover the cost of recording shall be collected
from the buyer at closing.
HUD-1 PREPARATION: You must accurately prepare the Preliminary HUD-1 or Settlement Statement
and provide it to MMREM at least five(5) business days in advance of the scheduled closing date for
their review, approval, and return prior to closing. This can be accomplished by uploading the HUD-1
for review into the YARDI Portal system, per the instructions that were provided to you upon your
registration.
DEED PREPARATION: You must prepare a Special Warranty or Grant Deed (where applicable) and
provide it to the MMREM at least five (5) business days prior to the scheduled closing. The Deed can be
sent to Asset Manager electronically by emailing to deeds.philly@mmrem.com. MMREM will execute,
notarize, and return the original Deed via overnight delivery. Be sure to Include a return address which
is accessible by their overnight mail carrier.
EXTENSIONS: If an extension is required, the purchaser’s real estate broker will need to submit to
MMREM (5) day prior to the expiration of the sales contract
(1) closing extension request form,
(2) documentation supporting the delay,
(3) extension fee of $375.00, PAYABLE TO HUD.
MMREM will provide you with an electronic notification of the approval and copy of the executed extension
agreement which will provide you with the new contract expiration date. MMREM will also provide the
amount of the extension fee that was collected. In no case shall a closing take place on an expired
contract.
WIRE PROCEEDS: You must wire proceeds to the US Treasury via FEDWIRE the day of but not later than
the next available banking day after closing, ensuring the amount matches that of the executed HUD-1.
MMREM will provide specific wiring instructions, including the form to be used (see attached).
PLEASE MAKE SURE THAT THE HUD CASE# IS ON THE WIRE BEING SENT!!!!!
DEED RECORDING: You must ensure the deed is delivered for recording to the appropriate county
recorder’s office no later than one (1) business day after closing.
NOTIFICATION OF CLOSING: You must notify MMREM via email to
Preapproval.philly@mmrem.com on the day the closing has or has not occurred.
CLOSING PACKAGE: You must deliver a complete closing package to MMREM not more than three
(3) business days after the closing is completed. The post-closing package shall include
ͻ Final HUD-1 and the Certification;
ͻ Copy of the wire of proceeds transfer confirmation;
ͻ Evidence that the deed was delivered for recording;
ͻ Copy of any invoice HUD paid at closing;
ͻ Copy of disbursement log, accounting for all incoming and outgoing funds related to this
transaction; and,
• For special program sales: Original Note and copy of GNND or ACA Deed of Trust or Mortgage,
with evidence it was delivered for recording.
Submit closing package to:
Matt Martin Real Estate Management
535 Pennsylvania Avenue, Suite 350
Fort Washington Pa. 19034
Attn: Closing Department
CANCELED SALE: If the sale is canceled and is not immediately rescheduled, the deed must be returned
to MMREM within two (2) business days of the original scheduled closing date. If the sale does not
close on the scheduled date, notify MMREM immediately via email at
readytoclose.philly@mmrem.com as to the date the closing is rescheduled or if it has been canceled.
If the sale has not been rescheduled or is canceled, the Closing Company shall scan the original of the
signed deed, marked VOID in large letters across the front, and electronically deliver it to MMREM no
later than the second business day after a closing is cancelled. The original document should then be
mailed to MMREM that same day, along with the earnest money deposit, PAYABLE TO HUD and any
extension fees that are in your possession. AT NO TIME IS ANY EARNEST MONEY TO BE RELEASED
UNTIL YOU RECEIVE THE EARNEST MONEY DISPOSITION LETTER FROM MATT MARTIN REAL ESTATE
MGMT.
FORFEITED EARNEST MONEY: Comply with the earnest money forfeiture policy that was signed by the
buyer(s) and is part of the executed sales contract package. Earnest money forfeitures are to be sent to
MMREM, payable to HUD, within 2 business days of the earnest money disposition issued by MMREM
or expiration of the contract whichever shall occur first. NOTE: AT NO TIME IS ANY EARNEST MONEY
TO BE RELEASED UNTIL YOU RECEIVE THE EARNEST MONEY DISPOSITION LETTER FROM MATT
MARTIN REAL ESTATE MGMT.
Standards for Acceptable Closing Companies.
Buyer Selected Closing Companies (BSCC) must certify that they meet the following standards:
1. A BSCC must be an attorney, title company, or escrow company. In addition, any BSCC must
meet all requirements of state and local laws (e.g., if the property is in a state that bans
attorneys from conducting a closing, an attorney may not be used as a BSCC).
a) Use of attorneys - An attorney or law firm may act as a BSCC, provided that they are
duly licensed to practice law in the state where the property is located and state law
allows an attorney to facilitate Real Estate closings.
b) Use of title companies - A title company may act as a BSCC, provided that they are duly
licensed to do business in the state where the property is located, and are regulated by
the State Insurance Commission, or similar regulatory agency recognized by the State.
c) Use of Escrow Company - An escrow company may act as a BSCC, provided that they
are duly licensed to do business in the State where the property is located and meet all
state legal and regulatory requirements as a recognized and registered escrow
company.
2. Insurance and Closing Protection Letter requirement - Any BSCC must be covered by Errors and
Omissions Insurance of at least $1,000,000. Title companies shall provide a Closing Protection
Letter (CPL) to insure against any improper handling of HUD's proceeds or deed.
3. A BSCC must complete a one-time registration to receive a HUD issued Settlement Agent
Identifier number.
4. Conflict of Interest - A BSCC who has, or whose spouse, children or business associates have, a
financial interest in the property shall not be involved in the closing process. Financial interest
includes having an equity, creditor, lender, or debtor interest in any corporation, trust, or
partnership with a financial interest in the property.
5. Debarment or suspension - No attorney, Title Company, Escrow Company, or BSCC, currently
debarred, suspended, or otherwise excluded by Administrative Action from participating in
Federal programs, may participate in any aspect of the closing or title clearance process.
6. Non-Discrimination - No BSCC, employee, or person or entity otherwise authorized to act for a
BSCC agent may act in violation of Title VIII of the Civil Rights Act of 1968 (the "Fair Housing Act"
Title VIII or Public Law 90-284) or Executive Order 11063. BSCC’s, their employees, and any
person or entity otherwise authorized to act on behalf of a BSCC shall (1) refrain from
discrimination on the basis of race, color, creed, religion, sex, national origin, age or handicap;
(2) instruct their staffs in the policies of nondiscrimination and all applicable local, State, and
Federal fair housing and non-discrimination laws.
7. Failure to Abide by HUD’s Closing Instruction - HUD reserves the right to sanction or remove
any BSCC that does not abide by HUD’s Closing Instruction.
Warning: Falsifying information on this or any other form of the Department of Housing and
Urban Development is felony. It is punishable by a fine not to exceed $250,000 and/or a
prison sentence of not more than two years. (18 U.S.C. 1010, 3559; 3571)
You must certify below that you meet the above standards, by emailing the signed acceptance back to
deeds.philly@mmrem.com that you understand and will comply with these general instructions and
requirements. Subsequent instructions may be provided in writing on a case by case basis by HUD
through its Asset Manager.
Acknowledged Date
Printed Name Telephone#
Principal Title Email
State License # HUD Identification #FILE NAME:
FILE NO.:
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