Assigning HUDs

Okay just wondering if anyone has had any luck farming HUD foreclosures and assigning the contracts or if that’s something HUD just won’t tolerate.

Yeah I know… another lackluster semi-easy question :smiley:

TIA guys!

From what I undestand, Hud doesn’t assign. You must live on property for 1 or to years. (Fines and imprisonment attached if you fail to comply.)


If you buy it as owner occupant, then they expect you to live in it for at least a year.

If you buy it as an investor, then if not mistaken you need to do double closing but someone else can correct me on this.

HUD, as well as most other REO sellers, do not allow assigning the contract. The simple reason, they want to know exactly who it is that is closing the sale. Too many lenders had been burned in the past with assignments, so they nixed it altogether.

There are various ways around this, but all require more $$$, so the deal has to be worth more to the end buyer/investor. Hard to do with listed properties and HUD.


fadiz and Raj are both correct: HUD does not allow assignments and you are only expected to live in a HUD property if you buy it as an OWner Occupant. If you buy during the “All Others” period, you can do as you wish with it after you close on it.


okay Thanks guys!

actually, read the contract paperwork HUD sends back to ur realtor. there should be a clause in there that they WILL allow an assignment of the contract with their approval only. in my experience this rarely happens though.

Correct. It is in the contract but rarely allowed. As mentioned HUD and most lenders with REO properties do not allow assignments. In fact, most of the contracts with these other lenders state specifically that an assignment will not take place.

A double closing or back to back is fine as long as the buyer that has the contract actually closes on the property. These lenders don’t care if that buyer only “owns” it for 5 minutes and then sells it to someone else.

But be aware that cutesy language and other “ways around” the assignment clause are being looked at as fraud. The banking industry is not stupid.

You don’t need to play games.

Steele in Minnesota
Foreclosure Specialist/Loss Mitigator
REO Department