HUD FHA REO Rule Changes - EFFECTIVE 09/12
September 14, 2016
HUD Issues Final Rule Adjusting Standards for Sales of FHA REOs, Aiming to Obtain Higher Sale Prices
The Department of Housing and Urban Development issued a final rule on Thursday regarding sales of real estate owned single-family properties that had FHA insurance. HUD said the final rule will create efficiencies in property disposition and help HUD obtain the greatest value for REO properties.
HUD expanded the valuation methods available for pricing REOs sold by HUD to include broker price opinions and automated valuation models. HUD also expanded the ways REOs can be listed for sale. In addition the purchaser’s broker will be required to submit bids through HUD’s designated electronic system rather than through the listing broker.
For REOs that don’t meet minimum property standards for FHA financing, HUD increased the maximum amount that buyers would be required to place into escrow for repairs on the property to $10,000 in order to qualify for an FHA mortgage.
Good Neighbor Next Door (GNND) program changes, HUD proposed revising the GNND program to provide that law enforcement officers, similar to teachers and firefighters, live in the areas they serve.
The final rule is little changed from a proposed rule issued in October. For more information on the above summary please click here. The rule takes effect September 12, 2016.
K.M. Minemier can be reached Toll Free at (877) 394-8736.