HUD, live in 12mo??

Here is what it says before you make a bid, do I have to live there for 12 months if I want to flip it and for my next hud purchase do I really have to wait 24 months???

Attention Brokers and Agents
Michaelson Connor & Boul reserves the right to accept or reject any and all bids, and assumes no responsibility for any errors in the listing information. MCB is not responsible for errors or equipment failures that may occur in the electronic transmission of bids.

Complete the HUD 9548 (1/99) sales contract and required addenda, including obtaining the purchaser’s pre-qualification letter and earnest money check, prior to submitting a bid

The SSN or FIN submitted on the bid MUST EXACTLY match the SSN or FIN on the sales contract. Typographical errors, erroneous entries, or generic entries will result in cancellation of the accepted offer. Please verify that the correct SSN or FIN was entered prior to pressing the submit button on the entry form.

If your bid is posted on the website under “Bid Results” as the accepted offer the original contract and addenda must be received at MCB within 48 hours. Please overnight (faxes are not acceptable) your sales package and keep the tracking number.

The purchase price, closing costs, and selling agent commissions submitted on a bid may not be changed after acceptance of the offer.

Owner Occupant purchasers must certify they have not purchased a HUD-owned property as an owner occupant within the past 24 months, and will occupy the property as their primary residence for at least 12 months.

Brokers and Agents certify they have reviewed MCB’s Broker Handbook prior to submitting a bid.

if you want to flip, you need to wait until they open it up to all investors. usually in the on-line listings they tell you what date that will be.

No they didn’t put the date but it has only been on for a little over a month.

According to this statement, if you buy during the Owner Occupied period, you must live in the property for 12 months and you are certifying that you haven’t done so within the last 24 months. This is the case IF you buy during the O/O period.

The HUD resales program is a government program to primarily assist lower income folks be able to afford a home of their own. Secondarily, if the property doesn’t sell, it will be opened to bidding by all. The O/O period is only 9 days.

To twist the rules for one’s own benefit is illegally and also morally wrong. It potentially deprives someone with a real, verifiable need of a home so someone else can profit financially. IT also puts the assisting real estate broker at risk of sanctions. My advice is simple: think about it and do the RIGHT thing!

BTW, HUD is Federal - the investigiting agency is the FBI…


LOL, I’m new to this and didn’t have a clue that it was just for low income ppl, plus just to give you a little about the property, it has mold, settlement cracks and water infiltration so it is unlikely that a low income family will be able to afford and fix it for what they want for it… sorry if it sounded like I was trying to twist things but I wasn’t, I just didn’t understand what they were saying… also, if hud is just for low income families to buy, why do you see all these books about buying hud homes and fixing them?

so isn’t a good place to look for houses… I didn’t know it wasn’t opened to everyone to buy…how will I know when it is???

I didn’t say it was JUST for them…I said they have first shot at them for 9 days. If none submit an acceptable offer, the bidding will open to everyone, including investors.

Go to the HUD website and click on the state that you are interested in and go from there…


This is just info for those who don’t know. The first 10 days or so, when a HUD repo is put on the HUD website is the time period given to owner occupied buyers. You can’t get around it, wait patiently until the deadline is available to owner-occupied buyers AND investors & then submit your bid through a local agent. This is just a little bit of advice. I currently work with 3 to 4 investors, I personally go to each property they want to bid on & review or inspect it, take pictures with my digital camera & send it to them, etc. I have found repairs that didn’t show on the hud website, also a condo showed 2 bedroom on the website but when I got there it had only 1 bedroom. I try to keep my investors happy. Before I even go to a property, I do a CMA to see what homes in that area were selling for within the last 12 months so that I can estimate the equity amount, etc. how long homes are selling for in that area, etc. so that when my investors flip it, they can get an idea of how long it may be on the market.
Research & interview several realtors before you select one to place your bid with. If it’s a hot area, I’ll reduce my 5% commission to increase my investor’s bid on getting accepted.
As far as the 12 month requirement, when you, the investor, put the repo on the market to resell, if a potential buyer comes to you that is approved for a FHA loan, the FHA underwriting wants the current owner to be on title for 12 months or more, if a potential buyer is approved for a conventional loan to buy your repo, that underwriter usually wants you to be on title for at least 6 months or more.
Your buyer would need to find this information out from their loan officer. I was a loan officer for 8 years so that’s the only way I know this. I am currently a realtor.

I watch my HUD home listings in my area ( Midland, MI) and see very few deals that are worth my while. Usually, they seem to be overpriced when they hit the market. Is there really any money to be made on these in a cool market?

Yes, you can make money on the hud listings. You won’t know if they are “good” deals until you do your research. Get a Realtor who KNOWS what they are doing, to compile a CMA on the homes you are interested in bidding on, you want to look at how long homes in that area are on the market before they sell, estimated appraised value, the expenses for improvement, net amount you may get after expenses, etc., order a home inspection report, etc.

Yes, this is a lot of junk in the HUD listing but there are some “diamonds in the rough” to found. I just picked one up last week after watching it for months. It was over priced to start, but HUD took my low bid after 2 months with no bidders.

As for holding time on title, there are lenders who have loan programs with little or no seasoning requirements. I already have two brokers lined up to refer a potential buyers to if they have seasoning issues. Also I am fully prepared to document the work done to justified the price. The place is currently unliveable, but I got two guys working full-time in there. In 30 days it will be a different story.

I’m very familiar with lenders who offer loans for homes with no seasoning on title BUT they carry high interest rates. A smart home buyer, doesn’t need to take a high interest loan if they may qualify for a traditional, conventional, FHA, or VA loan & get a lower interest rate.

Its very simple. If you purchase as a OO, you will have to sign the HUD 9548D Owner Occupant Certification Form. Basically, you plan to live in the property for at least 12 months as your primary residence(as an OO) and you have not purchased a HUD property as a OO in the last 24 months. None of this applies if you purchase as an Investor once the property roles into “all purchasers” status. This is the route you would want to go if you honestly don’t plan on living in the property as your primary residence. Also make sure and read the fine print, its is a felony to fasilfy any HUD documents punishable by up to 2 years in prison or up to a $250k fine.
For those curious how would HUD know if you purchased as an OO within 2 years? Your HUD bid is placed online, one of the important bits of info required is the primary purchaser’s social security number. The system will not allow the agent to place the bid with a SS number that has been used as an OO within the last 2 years.

Couple of other points…

The simultaneous OO bid period is 10 days. Friday through the next Sunday. Investor bidding opens that following Monday if there was not an “acceptable” OO bid placed within those 10 days.

The HUD program has nothing to do with lower income families. HUDs are priced from a licensed state appraisal; that’s how HUD determines their listing price. What HUD wants and intends is for people to buy them to live in them first. They want more home owernship, less investors. Hence the OO bid period. What HUD offers to help families is pay up to 5% of the purchase price in closing cost. Its all about their “net”. Asking for CC also affects the net to HUD - important.

HUDs are like any other foreclosure, some are deals and some are not. HUD properties generally offer an OO the best possible angle compared to an investor. In my area, very few make it to all purchaser status, especially since HUD and FEMA rehabbed a majority of them.

My advice for an investor is do a google search on HUD flipping rules. There is a lot of incorrect info being stated on this forum. HUD foreclosures are actually very easy to buy,rehab and then resale for a profit. (OK, if you can find the right property first and get your bid accepted). Please read HUDs rule “FR-4615 Prohibition of Property Flipping in HUD’s Single Family Mortgage Insurance Programs”.

thanks for the updated info, I confirmed your info with a loan officer friiend.
You learn something new all the time