Listing and Selling HUD Homes (h)

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Helen is a registered Selling Broker and is representing Sally in the purchase of a HUD home. Helen offers to reduce her commission by 1 percent to secure the deal. The accepted bid on the home is $180,000. If HUD offers 6% in total commission for the transaction, what would Helen's portion of the commission be? Congratulations! That's the correct answer! A. $10,800 B. $5,400 C. $3,600 D. $1,800 Feedback: Helen's discount would only come off her portion of the commission, so she would receive 2% of the sale price. ($180,000 x .02 = $3,600)

1. In 1932, George wanted to purchase a home. Which of the following loans would he NOT find at that time? A. 50% down payment loan B. Balloon payment loan C. 30-year term fully amortized loan This is the correct answer D. 3-year term loan This was your answer, which is incorrect. Feedback: Fully amortized loans were not available prior to 1934. This was discussed in Unit 1, Chapter 1, Lesson 2. 2. Gupta is purchasing a single family home with FHA financing with a 15-year fully amortized loan. The original loan had a LTV of 85%. When would she be able to stop paying the annual mortgage insurance premiums? A. Gupta would not be required to pay an annual mortgage insurance premium. C. When the loan is refinanced or paid off. This is the correct answer D. Feedback: Mortgage insurance premiums are permanent for the life of an FHA loan. This was discussed in Unit 1, Chapter 1, Lesson 2. 3. Oscar is registering with HUD to sell HUD homes. Which of the following would NOT be required in his application? A. NAID number Congratulations, this is the correct answer! B. Copy of his broker`s license. C. Signed HUD`s Seller Broker Certification Form. D. Copy of his driver`s license. 4. Frankie is purchasing a single family home with FHA financing with a 15-year fully amortized loan. The original loan had a LTV of 95%. When would she be able to stop paying the annual mortgage insurance premiums? . D. When the loan is paid off or refinanced. Congratulations, this is the correct answer! 5. Ignacio is looking to purchase a duplex and rent out both units. Which of the following statements is TRUE regarding this purchase if Ignacio wants to get financing through FHA? A. Ignacio would not be able to get FHA financing because he will not be occupying the property. Congratulations, this is the correct answer! B. Ignacio would not be able to get FHA financing because there is more than one unit in the property. C. Ignacio would be able to get FHA financing if he also purchases mortgage insurance. D. Ignacio would be able to get FHA financing if he makes a 20% down payment. 6. An organization contracted by HUD that inspects HUD homes and prepares them for market is called a(n) ________________________. A. Field Service Manager Congratulations, this is the correct answer! B. Asset Manager C. Mortgagee Compliance Manager D. Oversight Monitor 7. Robert is a registered selling broker and is showing a HUD home to Sandy. To secure the purchase, Robert offers to reduce his commission by .5% to make the bid more attractive. If the bid price is $140,000 and the Asset Manager offers 5% total commission on the property, what would Robert`s final commission be? D. $2,800 This is the correct answer Feedback: Robert`s discount must come from his own portion of the commission. Therefore, the total commission on $140,000 is 5% or $7,000, but Robert?s portion would only be 2%, or $2,800. This was discussed in Unit 1, Chapter 2, Lesson 4. 8. Ellen is purchasing a single family home with FHA financing with a 30-year fully amortized loan. When would she be able to stop paying the annual mortgage insurance premiums? A. When her LTV reaches 80% and the premiums have been paid for at least 11 years B. When the LTV reaches 78% and the premiums have been paid for at least 10 years C. When the LTV reaches 78% and the premiums have been paid for at least 15 years D. When she refinances or pays off the loan Congratulations, this is the correct answer! 9. Quentin is an active duty police officer. He saw a HUD home for sale that was in a revitalization area. The list price on the property was $80,000. What could Quentin purchase the property for if he was approved for the GNND program? A. $60,000 B. $50,000 C. $40,000 Congratulations, this is the correct answer! D. $1 Retake Exam Continue Course

Community Advancement Programs One of HUD's main objectives is to provide opportunities for home ownership to those who have not had such an opportunity previously. HUD has set up special programs to assist in this endeavor. Revitalization Areas Many areas in our country have been hit hard by economic conditions. HUD was given authority through the National Housing Act to designate areas throughout the United States as "Revitalization Areas." Revitalization areas are intended to promote growth and expansion through home ownership and require federal assistance for affordable housing. Areas are designated as revitalization areas based on average household income, home ownership rates, and FHA-insured mortgage foreclosure activities. HUD-owned single family properties in revitalization areas are eligible for discounted sale prices through special HUD programs. Asset Control Area (ACA): Certain foreclosed properties conveyed back to FHA and deemed to be located in an ACA are first offered for sale to state, county, and/or local governments, as well as approved nonprofit organizations. HUD homes with an appraised value of $25,000 or less may be purchased for $100; all other properties sold under the ACA program are offer ACA program are offered for sale at a minimum discount of 50 percent of the appraised property value.

esson 2: FHA Loans and Mortgage Insurance - Continued FHA places a maximum on the loan amount it will insure. However, this limit varies based on the location of the property and the number of units in the property. For example, in the state of Pennsylvania, a property located in Philadelphia would have the following loan limits: Single Family Residence $379,500 Duplex $485,800 3-unit $587,250 4-unit $729,800

FHA Loans and Mortgage Insurance - Continued To encourage lenders to make such loans, FHA created the mortgage insurance program. This insurance protects the lender against losses that might incur if the loan defaults for the amount above the standard Loan to Value (LTV) levels. On loans that are 95-100 percent LTV, mortgage insurance usually covers the top 30 percent of the principal balance in case of default. Most private mortgage insurance (PMI) companies will lower the protection to 17 percent of the loan balance for loans below 90 percent LTV and to 12 percent of the loan balance for loans below 85 percent LTV. Mortgage Insurance

FHA Loans and Mortgage Insurance — Continued In general, many conventional mortgages require 10 to 25 percent of the purchase price as a down payment (typically, 20 percent down, or an 80 percent loan to value/LTV). There are exceptions, however, that may decrease down payments to around 3 percent for first-time home buyers, or increase them to 30 to 35 percent for credit-challenged borrowers. The typical down payment of around 20 percent reduces the risk to the lender in case of default because there is a buffer between the current market price and the amount the lender is putting at risk to lend to the borrower. FHA is not a direct lender, yet it works with private lending institutions to offer special loan programs that may help people purchase residential properties. FHA loans have more flexible approval requirements and lower down payments—even as low as 3.5 percent of the purchase price. FHA loans are only for owner-occupied, single family homes, condos, townhomes, or multi-unit homes up to four units. Commercial properties, apartment buildings, and other properties that would not be used as a primary residence, such as a vacation home, are not eligible for an FHA loan. FHA loans also helped borrowers avoid the previous three-year to five-year loan terms and their large balloon payments. Instead, FHA loans instituted 15-year and 30-year loan terms with full amortization, meaning that when the loan term ends, the loan is fully and completely paid off. Unit Quizzes and the minimum required study time must be met to unlock Final Exam.

anice purchased a home through an FHA loan from ABCD Lending Company and then defaulted on that loan two years later. ABCD Lending Company completed foreclosure proceedings, obtained the property, and filed a claim with FHA. When the claim is paid, who owns the property? D. U.S. Department of Housing and Urban Development Feedback: When the FHA mortgage insurance claim is paid, the deed is transferred to HUD. Congratulations! Please use the next button to continue.

HUD Management and Marketing Program - Continued Field Service Managers (FSMs) and Asset Managers (AMs) FSMs and AMs are contracted to represent the interests of HUD and make decisions regarding the properties that will give HUD the best possible outcome for the homes. FSMs handle tasks such as: Inspecting properties Preparing properties for sale Maintaining HUD homes, such as landscaping, pest control, etc., while the home is in HUD's possession Handling payments of regular costs, such as utilities, HOA fees, assessments, ground rents, etc.

HUD Management and Marketing Program - Continued Field Service Managers (FSMs) and Asset Managers (AMs) Asset Managers (AMs) have five primary objectives: Accurately and competitively value and price HUD homes Achieve the highest net return on property sales Minimize holding times (meaning how long a HUD home is on the books) Create owner-occupant sales opportunities Properly account for and deliver to HUD closing proceeds in a timely manner. AMs handle such tasks as: Analyzing market and property conditions Representing the interests of HUD during the transaction Following HUD procedures in marketing properties for sale Performing cosmetic repairs on properties that meet HUD's goals (this is not mandatory) Administering discount programs, such as the Good Neighbor Next Door program Contracting with Local Listing Brokers (LLB) to handle properties in local areas, provide access to the properties, and support the sale process Ordering an appraisal to determine the price on a home Listing properties (through local listing brokers) on the Multiple Listing Services (MLS) and the HUD web site Ensuring properties are marketed according to fair housing laws and meet required standards for signage, advertising, and Internet marketing Communicating with FSMs regarding any repairs needed to the property, to maintain HUD standards.Selling and Buying HUD Homes When a HUD home is available for sale, the Asset Manager (AM) will list the property on the Multiple Listing Service (MLS) in addition to HUD's own web site. Who can sell HUD homes? Any licensed real estate broker (or their agents) who has registered with HUD can find buyers for these homes and submit bids through an electronic bid process. To register to sell HUD homes, you must: Sign HUD's Selling Broker Certification forms. You can do this by following the broker registration link on the Management and Marketing Contractors page for your state. You will need to submit the following forms (click each link for a copy of the form): SAMS 1111 Broker Application SAMS 1111A Selling Broker Certification Attach required documentation, such as: Copy of broker's license IRS documentation Driver's license Utility bill or phone bill Send forms to the Asset Manager (AM) who will forward the forms to the Home Ownership Center (HOC) in your area. Separate registration forms and signatures are required for each office in a multi-office firm. After processing (usually in three to eight weeks), you will receive an official NAID number (Name Address Identifier). Registrations must be renewed annually or when any changes are made to the name or address of the broker.

HUD Management and Marketing Program - Continued HUD homes are divided into 10 geographic areas, and these areas are divided among up to three Asset Managers (AMs). Each area to be covered is large with many properties to be sold. As a result, AMs are responsible for hiring licensed real estate brokers who are responsible for listing properties in local areas. These brokers, called Local Listing Brokers, are hired to perform the tasks involved in the listing processes, such as the following: Listing the properties on the MLS Placing "For Sale" signs on the property Doing final prep work on the property for showings Distributing keys to the selling brokers who wish to show houses to prospective buyers Presenting accurate and complete contract packages to AMs for submission to HUD Holding open houses on the property as needed. The M&M III program has changed the way Local Listing Brokers are compensated. In the past, Local Listing Brokers would receive compensation only if they actually found a buyer, and they would receive the full commission. Now Local Listing Brokers are compensated in the same manner as listing brokers are in most private sales: the local listing broker shares the commission with the Selling Broker. HUD has mandated that commissions will be on a 50/50 split. In states that allow agency relationships in which a broker can represent both the buyer and the seller in the same transaction, the Local Listing Broker can also represent buyers in a HUD home transaction. Consult with your state regulatory board and your state agency laws to see if this is permissible in your state. ach Asset Manager (AM) will determine how to acquire and choose Local Listing Brokers for their areas. The selection or qualification process is not mandated.

Lesson 2: FHA Loans and Mortgage Insurance — Continued FHA mortgage insurance is paid by the borrower and usually costs about 5 percent of the original loan amount per year, plus an upfront insurance premium. The upfront premium is paid at closing or is added to the loan amount. These premiums are mandatory if a borrower wants to get an FHA loan. As of March 2014, the upfront mortgage insurance premium is 1.75 percent of the loan amount. That would be about $3,500 on a $200,000 mortgage loan, for example. The annual mortgage insurance premium varies depending on the loan's terms and loan-to-value ratio. In 2014, it can range from 0.45 percent to 1.35 percent of the loan amount. Previously, private mortgage insurance companies could require the insurance to be paid for the life of the loan. However, in 1998, the Federal Government passed the Homeowners Protection Act, requiring lenders to cancel the mortgage insurance requirement when the principal balance reaches 78 percent of the home's purchase price. However, it should be noted that The Homeowners Protection Act does not apply to Veterans Affairs (VA) or FHA loans, and only covers private residential mortgages purchased after July 29, 1999. The Act also posts a new set of requirements for "high risk" mortgages. As of June 2013, everything returned to square one. Private mortgage insurance was once again permanent on FHA loans for the life of the loan. Then, effective January 2017, there are variables affecting when it can be canceled and when it remains for the life of the loan.

If the lender takes possession of the property through foreclosure action or another method (see next screen) on an FHA-insured loan, the lender submits a claim against the mortgage insurance. As a condition of receiving payment on the claim, the lender will transfer the deed of ownership to HUD. Now HUD owns the residential property, which is considered real estate owned (REO). That property cannot stay in HUD's inventory because the funds HUD paid to the lender are now out of the insurance funds and need to be reimbursed. The funds in the mortgage insurance funds come from mortgage insurance premiums. The longer that these properties stay on HUD's books, the longer the fund goes without reimbursement. HUD must recoup as much money as possible from the sale of these homes to keep the funds available for other claims.Foreclosures on FHA Loans and Deed Transfers to HUD - Continued The most common method for HUD to obtain ownership of properties is through foreclosure of properties with FHA-insured loans. However, there are other methods. The type of acquisition may impact the method by which the Field Service Manager (FSM) and Asset Manager (AM) are informed of the new assignment and the scope of services required. A listing of possible acquisition sources follows. Deed in Lieu of Foreclosure: These are properties conveyed to HUD by a mortgagee following a deed-in-lieu of foreclosure of an FHA insured mortgage, which means the borrower gave up the property to the lender without a foreclosure sale and then the lender filed a claim against the FHA mortgage insurance. Custodial Properties: These are properties secured by a second mortgage or home equity conversion mortgage (HECM), which are in default and, upon inspection by the FSM, determined to be vacant or abandoned. Foreclosed Secondary Held Mortgages (SHMs): These are properties acquired as the result of the foreclosure of a mortgage serviced by HUD including assigned and purchase money mortgages. Home Equity Conversion Mortgages (HECM): These properties were acquired as the result of foreclosure of a reverse mortgage insured by FHA. Legal Settlement: These properties were acquired as a result of a lawsuit or for other reasons such as to accommodate another federal agency and not insured by FHA. Repurchases/ Buy Backs: These are properties repurchased by HUD to resolve a post sale claim by the purchaser of a HUD Home. 184s: These are properties located on Native American or tribal lands and acquired as a result of foreclosure of a loan guaranteed by HUD's Office of Native American Programs (ONAP) under the Section 184, Loan Guarantee for Indian Housing Program of the Housing and Community Development Act of 1992. 312s: These properties were acquired as a result of foreclosure of a HUD Community Planning and Development's Rehabilitation Mortgage.

e: Listing and Selling HUD Homes (h) Welcome Bernadette Appling (Save Progress & Exit) Help • Glossary • Reports Table of Contents Completion Introduction Unit 1 Unit 2 Unit 3 Unit 4 Unit 5 nextback Unit 2 Quiz Results Your score: 67% Bernadette, Unfortunately, you did not attain a minimum passing score of 70%. You will need to retake and pass the quiz in order to continue with the course. Please take a few moments to review your quiz results below at which point you can re-take the quiz or return to the course to review the content for this section of the course. No need to be frustrated, you can take the quiz as many times as you need to. 1. Where would Raymond find out if there is a risk of lead-based paint in a HUD property he is purchasing, built in 1972? A. Property Condition Report B. On the listing description C. Lead-Based Paint Disclosure Addendum D. All of the above Congratulations, this is the correct answer! 2. Wayne works for a housing rehabilitation department of a local city government. He sees five properties located within his area that he would like to purchase for the city as rehab homes. If the properties were listed on Monday, September 13th, on what day could he purchase the properties for $1, if they are still available? A. Monday, September 13th B. Wednesday, October 13th C. Monday, March 14th of the following year. Congratulations, this is the correct answer! D. Never 3. Karen is purchasing a UI HUD home. How much would the repairs cost for this type of home? A. Under $100 B. Under $5,000 C. Over $5,000 Congratulations, this is the correct answer! D. Over $7,500 4. Which of the following codes is NOT one you will see on a HUD home listing? A. IN B. IE C. UI D. NI Congratulations, this is the correct answer! 5. Horatio is bidding on a HUD home and applying for FHA 203(k) financing. The home was built in 1964. If the home was found to have lead-based paint, what can Horatio receive from HUD to help offset the stabilization of the lead-based paint? A. HUD will credit Horatio up to 10% of the purchase price, or $4,000, whichever is less, to help pay for the costs. This is the correct answer B. HUD will credit Horatio up to $5,000 to help pay for the costs. C. HUD will credit Horatio up to 10% of the repair costs. D. HUD will not pay Horatio anything for the stabilization as HUD homes are sold "as-is." This was your answer, which is incorrect. Feedback: If deteriorated lead-based paint was identified in the Lead-Based Paint Inspection Report and the buyer is purchasing the home on a 203(k) loan, HUD will credit the buyer the amount in the stabilization cost estimate up to 10% of the purchase price, but no more than $4,000. This was discussed in Unit 2, Chapter 1, Lesson 3. 6. Linda is a registered Selling Broker. There is a HUD home that she wants to market. Which of the following is she NOT allowed to do if she wants to advertise the property? A. Post a sign in the front yard Congratulations, this is the correct answer! B. Post the ad on her own web site C. Post an ad in the newspaper D. Post an ad on a flyer 7. A HUD home (listed as an IE) is listed on Monday, September 13th. Thomas intends to purchase the property and use it as his primary residence. What is the earliest day he can place a bid? A. Monday, September 13th This is the correct answer B. Tuesday, September 14th C. Saturday, September 18th This was your answer, which is incorrect. D. Thursday, September 23rd Feedback: Owner occupant buyers can bid on the first day of the listing. This was discussed in Unit 2, Chapter 1, Lesson 1. 8. Gabe is bidding on a HUD home that was built in 1980. Which of the following must be given to Gabe? A. Lead-Based Paint Disclosure Addendum B. EPA brochure, "Protect Your Family From Lead In Your Home" C. Both the Lead-Based Paint Disclosure Addendum and the EPA brochure, "Protect Your Family from Lead in Your Home" D. Neither the Lead-Based Paint Disclosure Addendum nor the EPA brochure, "Protect Your Family from Lead in Your Home" Congratulations, this is the correct answer! 9. Joseph is buying a HUD property listed as "UI." What type of FHA financing could Joseph qualify for? A. FHA 203(b) B. FHA 203(h) C. FHA 203(k) This is the correct answer D. Joseph would not qualify for FHA financing. This was your answer, which is incorrect. Feedback: The FHA 203(K) Rehab loan program is designed for HUD properties needing more than $5,000 in repairs. This was discussed in Unit 2, Chapter 1, Lesson 4.

Korinne is purchasing a HUD home that is listed as "IN." What method of payment would Korinne NOT be eligible to use to purchase the property? A. Conventional Financing This was your answer, which is incorrect. B. FHA 203(b) C. Cash Purchase D. FHA 203(k) This is the correct answer Feedback: FHA203(k) is for properties that are "UI," meaning they require repairs over $5,000. This was discussed in Unit 3, Chapter 1, Lesson 2. 2. Amber is a registered Selling Broker and has a buyer with whom she has an independent Buyer Brokerage Agreement. The agreement states that the buyer will pay Amber`s fees regardless of the properties purchased. If Amber`s client purchases a HUD home with a 5% total commission, how much of that commission would Amber receive? A. 5% This was your answer, which is incorrect. B. 3% C. 2.50% D. 0% This is the correct answer Feedback: Amber would not receive any of the HUD commission because she is already being paid by the buyer. This was discussed in Unit 3, Chapter 1, Lesson 4. 3. Paolo is purchasing a HUD home that is list as an "UI." Which of the following can the rehabilitation funds be used? A. Replacing the furnace B. Rewiring the property to be up to code C. Adding insulation and low emission glass windows D. All of the above Congratulations, this is the correct answer! 4. Connie is a registered Selling Broker. Her client`s bid was accepted. How long does the client have to perform all home inspections? A. Five days from the acceptance date B. 15 days from the acceptance date Congratulations, this is the correct answer! C. 30 days from the acceptance date D. Up until closing 5. Tabitha is bidding on a HUD home. Which of the following is NOT required as part of the electronic bidding process? A. Completing the HUD Sales Contract 9548 B. The Selling Broker`s NAID number This was your answer, which is incorrect. C. Tabitha`s Home Inspection Report This is the correct answer D. Tabitha`s disclosure of whether or not she will be occupying the property Feedback: The home inspection occurs after the bid has been accepted. This was discussed in Unit 3, Chapter 1, Lesson 1. 6. Forrest is bidding on a HUD home that has a deadline of "daily." He submits his bid on Saturday. When will his bid be reviewed? A. Saturday B. Sunday C. Monday Congratulations, this is the correct answer! D. Tuesday 7. Andrew is bidding on a HUD home with the help of Bridget, his Selling Broker. Up until what point can Bridget make changes to the electronic bid information? A. Up until she submits it to the Asset Manager for consideration Congratulations, this is the correct answer! B. Up until acceptance C. Up until the sales contract is accepted D. Up until closing 8. Valerie is a registered Selling Broker. She receives an earnest money deposit from her client. What does she do with the check when her client`s bid is accepted? A. Valerie deposits the funds into her trust account. B. Valerie deposits the funds into her general business account. C. Valerie sends the funds to the closing agent. D. Valerie sends the funds to the Asset Manager with the Sales Contract Package. Congratulations, this is the correct answer! 9. Nathan is purchasing a HUD home that is listed as an "IE." After the home inspection, Nathan determines that the house needs $3,000 for the repairs. After the sale closes, how long does Nathan have to complete the repairs? A. 30 days B. 60 days This was your answer, which is incorrect. C. 90 days This is the correct answer D. 120 days Feedback: The buyer is required to make the repairs to the home within ninety (90) days after closing so that the home meets FHA Minimum Property Standards. This was discussed in Unit 3, Chapter 1, Lesson 2.

Lesson 2: FHA Loans and Mortgage Insurance FHA Logo The Federal Housing Administration (FHA) was established in 1934 during the heart of the Great Depression. The economic conditions of the time were very bleak. Unemployment was around 25 percent or more. If someone wanted to buy a home using financing, the lending terms were very difficult, sometimes requiring 50 percent down, high interest rates, and repayment of the loan within three to five years, culminating in a huge balloon payment. Only about 40 percent of all households owned their own homes. The FHA began insuring loans for lenders. Because of this insurance, lenders were more willing to extend credit. To avoid the problems with mortgages in the past, the FHA developed the 30-year fully amortizing fixed-rate loan program. Borrowers were no longer faced with large balloon payments and could be assured that their loans could be paid off at the end of their term. The longer amortization also meant lower monthly payments for borrowers. During the 1940s, new FHA programs were developed to help veterans returning home from World War II. Later, other home ownership programs were developed specifically to help the elderly, the disabled, and lower income Americans.

Lesson 1: HUD Management and Marketing Program To manage and sell the large numbers of properties in HUD's possession, HUD created the Management and Marketing (M&M) program. Originally developed in 1999, this program outsources the functions of managing and selling HUD homes to private, licensed real estate brokerages throughout the United States, the Caribbean, Guam, and the Northern Mariana Islands. HUD administers the M&M program from four Home Ownership Centers (HOCs), located in Philadelphia, Pennsylvania; Atlanta, Georgia; Denver, Colorado; and Santa Ana, California. Originally, the M&M contractors performed both the property management and sales of HUD homes. However, as of July 31, 2010, the M&M Program transitioned to M&M III, in which the functions of property management and marketing were split into four different types of vendors: Field Service Managers (FSM) — These private companies maintain and manage the pool of HUD homes in a given area. Their priority is to inspect, repair, and maintain these properties until they can be sold on the open market. Asset Managers (AM) — These private companies (separate from the FSMs) are responsible for listing and selling the homes within their assigned geographic area. Mortgagee Compliance Manager (MCM) — These private companies are responsible for pre- and post-property conveyance activities, including approval of claims for payments, title reviews, and inspection reviews. Oversight Monitors (OM) — These private companies review the performance of the overall REO portfolio and provide auditing and oversight of the entire disposition process. This division of responsibility allows the contractors to specialize. This process streamlines operations, provides flexibility, and capitalizes on expertise. Each area may have several companies in the FSM and AM roles, enabling competition, improving responsiveness, reducing risk, and increasing potential returns.

Lesson 1: Introduction Yes, Uncle Sam is in the Real Estate Business! The United States Department of Housing and Urban Development (HUD) sells approximately 40,000 single-family homes each year. HUD lists these properties with private real estate brokers, and buyers can purchase these homes, often at a discount. You may be taking this course because you want to get involved in the HUD home sales process, take advantage of the opportunity, and list some of these properties in your area. If so, you probably have some questions, such as: How did a department of the Federal government obtain so many residential properties? How can I list some of these properties? How much commission can I earn by selling HUD homes? What is the process? What are the restrictions and guidelines? How are these properties assigned to agents? This course aims to answer all of these and many more questions, and will give you the tools necessary to list and successfully sell HUD homes.

Lesson 1: Introduction — Continued What is a HUD Home, anyway? One of the departments within HUD is the Federal Housing Administration (FHA). The FHA was developed in 1934 to help more people obtain home ownership. The main function of the FHA is to work with mortgage lenders to insure certain types of mortgage loans. This insurance makes home ownership more affordable and accessible to lower income earners. FHA insurance covers any losses that the lender may incur if the home goes into foreclosure. If a borrower obtains a home mortgage with an FHA loan and then the home is foreclosed because of a default, the lender can go to FHA and make a claim against the mortgage insurance and receive compensation for any losses incurred by the lender. In exchange, HUD receives the deed on the property. Therefore, these properties are owned by HUD. HUD does not want to hold an inventory of houses! It needs to sell these homes as quickly as possible so it can replenish the mortgage insurance funds and cover other claims. Here is a link to HUD's listing site.

Wayne works for a housing rehabilitation department of a local city government. He sees five properties located within his area that he would like to purchase for the city as rehab homes. If the properties were listed on Monday, September 13th, on what day could he purchase the properties for $1, if they are still available? C. Monday, March 14th of the following year. This is the correct answer Feedback: Local governments can purchase HUD homes for $1 after 181 days on the market. This was discussed in Unit 2, Chapter 1, Lesson 1. 2. Omar is a Local Listing Broker and is also advertising properties for sale. His state allows dual agency. What can Omar put on his advertisements? . C. Properties are sold "As-Is." This is the correct answer 3. Quincy is purchasing a HUD home built in 1967 using conventional financing. Which of the following is TRUE? D. HUD will not pay Quincy anything for the stabilization because he is getting conventional financing, not FHA financing. Congratulations, this is the correct answer! 4. Danny purchased a HUD home in June. In August, the air conditioner broke. What recourse does Danny have as it relates to C. He does not have any recourse. HUD homes are sold "As-Is" and after the sale is complete, the buyer is responsible for all repairs. Congratulations, this is the correct answer! D. He can apply for a FHA 203(k) home repair loan. 5. Zack is a local real estate broker and has a client interested in a HUD home. What is required for Zack to have in order to show a HUD home to his client, as opposed to any other home? . C. A real estate license and a NAID number This is the correct answer D. A real estate license and he must be an Asset Manager Feedback: Remember that you must have a valid NAID number to show a HUD home. This was discussed in Unit 2, Chapter 1, Lesson 2. 6. Yolanda is a registered Selling Broker. With whom must she schedule an appointment to show a HUD home to her prospective buyer? C. The Local Listing Broker Congratulations, this is the correct answer! 7. Linda is a registered Selling Broker. There is a HUD home that she wants to market. Which of the following is she NOT allowed to do if she wants to advertise the property? A. Post a sign in the front yard Congratulations, this is the correct answer! B. Post the ad on her own web site C. Post an ad in the newspaper D. Post an ad on a flyer 8. Karen is purchasing a UI HUD home. How much would the repairs cost for this type of home? C. Over $5,000 This is the correct answer Feedback: UI properties are estimated to need more than $5,000 in repairs. UI properties are not eligible for FHA 203(b) loans but may be eligible for 203(k) loans. This was discussed in Unit 2, Chapter 1, Lesson 4. 9. A HUD home (listed as an UI) is listed on Monday, September 13th. Victoria intends to purchase the property as a rental. What is the earliest day he can place a bid? B. Saturday, September 18th This is the correct answer Feedback: For uninsured properties, there will be a 5 day exclusive listing period for owner occupants. The vendor shall open bids on the 6th day. If no acceptable bid is received, the vendor shall extend the listing to all buyers at that point. This was discussed in Unit 2, Chapter 1, Lesson 1.

Pam is a registered Selling broker. Which of the following statements is allowable for her to state on her own website? A. All of the HUD homes I sell are guaranteed by HUD against any structural defects. B. I have exclusive rights to sell HUD homes in this area. C. I am a registered HUD home seller. Congratulations, this is the correct answer! D. I can sell you HUD homes below the listed prices. 2. Gabe is bidding on a HUD home that was built in 1980. Which of the following must be given to Gabe? A. Lead-Based Paint Disclosure Addendum B. EPA brochure, "Protect Your Family From Lead In Your Home" C. Both the Lead-Based Paint Disclosure Addendum and the EPA brochure, "Protect Your Family from Lead in Your Home" D. Neither the Lead-Based Paint Disclosure Addendum nor the EPA brochure, "Protect Your Family from Lead in Your Home" Congratulations, this is the correct answer! 3. Edward has bid on a HUD home and it was accepted. The sale is scheduled to close in a week, so Edward wants to go into the property and do some repainting. When can Edward do the repainting? A. Only after the sale closes and he gets legal possession of the property Congratulations, this is the correct answer! B. Within 10 days of closing C. Within five days of closing D. Anytime after the bid is accepted 4. Yolanda is a registered Selling Broker. With whom must she schedule an appointment to show a HUD home to her prospective buyer? A. The Field Service Manager B. The Asset Manager C. The Local Listing Broker Congratulations, this is the correct answer! D. The Federal Housing Administration 5. Quincy is purchasing a HUD home built in 1967 using conventional financing. Which of the following is TRUE? A. HUD will credit Quincy up to 10% of the purchase price or $4,000, whichever is less, to help pay for the costs. B. HUD will credit Quincy up to $5,000 to help pay for the costs. C. HUD will credit Quincy up to 10% of the repair costs. D. HUD will not pay Quincy anything for the stabilization because he is getting conventional financing, not FHA financing. Congratulations, this is the correct answer! 6. Danny purchased a HUD home in June. In August, the air conditioner broke. What recourse does Danny have as it relates to the cost of the A/C repairs? A. He can request that HUD repair the A/C. B. He can sue the Local Listing Broker for not disclosing the defective A/C. C. He does not have any recourse. HUD homes are sold "As-Is" and after the sale is complete, the buyer is responsible for all repairs. Congratulations, this is the correct answer! D. He can apply for a FHA 203(k) home repair loan. 7. Allison is a registered Selling Broker. She has a client interested in a HUD home. On the day the client is available to view the property, Allison is out of town. What can Allison do to allow her client to view the property on his or her own? A. Allison can give the client the key and let the client view the property on his or her own. B. Allison can arrange to have the client be accompanied by a home inspector. C. Allison can leave the property unlocked for the client to obtain access. D. Allison can reschedule the viewing. No unauthorized person can gain access to a HUD home without being accompanied by a registered Selling Broker. Congratulations, this is the correct answer! 8. Fernando has an accepted bid on a HUD home. The sale closes in three days, so he wants to begin putting items into the garage. When would it be allowable for Fernando to do this? A. Fernando can move items into the garage only if the Selling Broker is present. B. Fernando is not permitted to use the property for storage at any time before closing. Congratulations, this is the correct answer! C. Fernando can move items into the garage two days before closing. D. Fernando can move items into the garage anytime after the bid has been accepted. 9. Linda is a registered Selling Broker. There is a HUD home that she wants to market. Which of the following is she NOT allowed to do if she wants to advertise the property? A. Post a sign in the front yard Congratulations, this is the correct answer! B. Post the ad on her own web site C. Post an ad in the newspaper D. Post an ad on a flyer

Community Advancement Programs - Continued Good Neighbor Next Door (GNND) Initiatives: Full-time law enforcement officers, pre-kindergarten through 12th grade teachers, firefighters/emergency medical technicians, qualified nonprofit organizations, and government entities may purchase HUD homes at a discount of 50 percent off the list price of the home. In return, these buyers must commit to live in the property for at least 36 months as their sole residence. Buyers who wish to participate in the GNND program submit their bid through a registered broker. The amount of the discount (50 percent of the sale price) becomes a silent second mortgage on the property. The home buyer does not need to make any payments on this note nor is any interest accrued as long as the 36-month occupancy requirement is met. The silent second mortgage is reduced to zero at the end of the three-year period. Earlier move out may initiate substantial penalties. The home buyer must not have owned any other real estate for one year prior to participating in the GNND program. Nonprofits and government agencies must submit a housing plan to HUD prior to their approval to participate under the program. In the housing plan, nonprofits and government agencies must identify an area (either certain zip codes or census tracts in which they are interested). They are then restricted to purchases in those areas. GNND and other special sales program properties are available for five days before they are for sale to the public. Eligible buyers are selected by lottery from those who indicate a willingness to buy and who meet all the other requirements and restrictions. They do not bid, but rather offer "full price" and get the appropriate discount (10-50 percent off the listed price) at the time of settlement and closing. All buyers, including those who qualify for GNND participation, must be represented by a HUD-registered broker with a NAID number.

Rich is a police officer and is looking for a home to purchase that is close to his station. A HUD home is available and is included in a revitalization area. If the listed price of the home was $82,000, what price could Rich potentially pay for the property, if he qualifies? Congratulations! That's the correct answer! A. $41,000

Selling and Buying HUD Homes When a HUD home is available for sale, the Asset Manager (AM) will list the property on the Multiple Listing Service (MLS) in addition to HUD's own web site. Who can sell HUD homes? Any licensed real estate broker (or their agents) who has registered with HUD can find buyers for these homes and submit bids through an electronic bid process. To register to sell HUD homes, you must: Sign HUD's Selling Broker Certification forms. You can do this by following the broker registration link on the Management and Marketing Contractors page for your state. You will need to submit the following forms (click each link for a copy of the form): SAMS 1111 Broker Application SAMS 1111A Selling Broker Certification Attach required documentation, such as: Copy of broker's license IRS documentation Driver's license Utility bill or phone bill Send forms to the Asset Manager (AM) who will forward the forms to the Home Ownership Center (HOC) in your area. Separate registration forms and signatures are required for each office in a multi-office firm. After processing (usually in three to eight weeks), you will receive an official NAID number (Name Address Identifier). Registrations must be renewed annually or when any changes are made to the name or address of the broker.

Lesson 2: Selling and Buying HUD Homes - Continued Who can buy HUD homes? These properties can be purchased by: Any qualified buyer that has written proof of pre-qualification by a mortgage lender Any qualified buyer who can provide proof of funds if purchasing with cash Any HUD approved non-profit organization. Asset Managers (AMs) strictly enforce fair housing laws. If your clients are financially qualified buyers, they can purchase a HUD owned home, regardless of their race, color, religion, sex, national origin, handicap, or familial

Selling and Buying HUD Homes - Continued After the Exclusive Sales Period, remaining properties can be sold to all classes of bidders during an Extended Sales Period. This can include non-owner occupant bidders, investors, or any other qualified bidders. Qualified non-profits and government entities are entitled to purchase properties at a discount during this period. The Extended Sales Period cannot exceed 180 days from the first offering date, which means both the Exclusive Sales Period and the Extended Sales Period in total will not exceed 180 days. $1 Homes: HUD properties that have been offered for sale for 180 days and that are not under sales contracts will be offered for purchase to local government agencies for a sales price of $1, along with applicable closing costs.

If no bids are received on an IE property, how long afterward can the IE adjust the price and relist the property? C. After 31 days This is the correct answer

Which of the following codes is NOT one you will see on a HUD home listing? D. NI This is the correct answer

1. When was the Federal Housing Administration created? A. 1923 B. 1933 C. 1934 This is the correct answer D. 1944 This was your answer, which is incorrect. Feedback: FHA was created in 1934 as part of the New Deal during the Great Depression. This was discussed in Unit 1, Chapter 1, Lesson 1. 2. Which of the following is NOT a location of one of the Home Ownership Centers? A. Los Angeles, CA Congratulations, this is the correct answer! B. Philadelphia, PA C. Atlanta, GA D. Denver, CO 3. Frankie is purchasing a single family home with FHA financing with a 15-year fully amortized loan. The original loan had a LTV of 95%. When would she be able to stop paying the annual mortgage insurance premiums? A. When the LTV reaches 78% and the premiums have been paid for at least 5 years. B. When the LTV reaches 78% and the premiums have been paid for at least 10 years. C. When the LTV reaches 78% and the premiums have been paid for at least 15 years. D. When the loan is paid off or refinanced. Congratulations, this is the correct answer! 4. Deborah is purchasing a single family home with FHA financing. She is required to pay an upfront mortgage insurance premium. How can she pay this amount? A. Pay it at closing in cash B. Add the amount to her loan balance C. Either she may pay it at closing in cash or add the amount to her loan balance This is the correct answer D. She may neither pay it at closing in cash, nor may she add the amount to her loan balance This was your answer, which is incorrect. Feedback: The upfront mortgage insurance premium can be paid in either method (cash at closing or added to her loan balance). This was discussed in Unit 1, Chapter 1, Lesson 2. 5. Pauline wants to buy a HUD home as a primary residence. She has received a pre-qualification letter from her bank to purchase a property up to $150,000. Which of the following is a TRUE statement about Pauline? B. Pauline can purchase HUD homes regardless of the condition. This is the correct answer Feedback: HUD homes can be purchased by any qualified buyer that has written proof of pre-qualification by a mortgage lender. 6. Bruce is purchasing a single family home with FHA financing. Which of the following is required for Bruce to pay up front as part of his FHA loan? C. 1.75% upfront mortgage insurance premium Congratulations, this is the correct answer! D. 2.0% upfront mortgage insurance premium 7. Kim has a 2 bedroom house, which she bought with an FHA loan. She was unable to make the mortgage payments and the lender foreclosed on the property. The lender was unable to sell the property to another buyer. If the lender filed a claim against the mortgage insurance, who would have the legal ownership of the house? D. HUD Congratulations, this is the correct answer! 8. Gupta is purchasing a single family home with FHA financing with a 15-year fully amortized loan. The original loan had a LTV of 85%. When would she be able to stop paying the annual mortgage insurance premiums? C. When the loan is refinanced or paid off. Congratulations, this is the correct answer! 9. Alden is purchasing a single family home and is looking for FHA financing. What is the maximum loan Alden can get through FHA financing? A. $500,000 This was your answer, which is incorrect. B. $300,000 C. $200,000 D. Depends upon the location of the property This is the correct answer

Which of the following is NOT a method by which HUD could obtain residential properties? A. Foreclosure action B. Direct purchase of a property for sale Congratulations, this is the correct answer! C. Deed in Lieu of Foreclosure D. Legal Settlement 2. An organization contracted by HUD to work with lenders and determine mortgage insurance claim payments is called a(n) ________________________. A. Field Service Manager B. Asset Manager C. Mortgagee Compliance Manager This is the correct answer D. Oversight Monitor This was your answer, which is incorrect. Feedback: Mortgagee Compliance Manager (MCM): These private companies are responsible for pre- and post-property conveyance activity including approval of claims for payment, title reviews, and inspection reviews. This was discussed in Unit 1, Chapter 2, Lesson 1. 3. Which of the following is NOT a task of a Field Service Manager? A. Inspecting properties B. Ordering appraisals Congratulations, this is the correct answer! C. Preparing properties for sale D. Maintaining HUD homes prior to sale 4. Deborah is purchasing a single family home with FHA financing. She is required to pay an upfront mortgage insurance premium. How can she pay this amount? A. Pay it at closing in cash B. Add the amount to her loan balance C. Either she may pay it at closing in cash or add the amount to her loan balance Congratulations, this is the correct answer! D. She may neither pay it at closing in cash, nor may she add the amount to her loan balance 5. Bruce is purchasing a single family home with FHA financing. Which of the following is required for Bruce to pay up front as part of his FHA loan? A. 0.5% upfront mortgage insurance premium B. 1.0% upfront mortgage insurance premium C. 1.75% upfront mortgage insurance premium Congratulations, this is the correct answer! D. 2.0% upfront mortgage insurance premium 6. Ellen is purchasing a single family home with FHA financing with a 30-year fully amortized loan. When would she be able to stop paying the annual mortgage insurance premiums? A. When her LTV reaches 80% and the premiums have been paid for at least 11 years B. When the LTV reaches 78% and the premiums have been paid for at least 10 years C. When the LTV reaches 78% and the premiums have been paid for at least 15 years D. When she refinances or pays off the loan Congratulations, this is the correct answer! 7. Robert is a registered selling broker and is showing a HUD home to Sandy. To secure the purchase, Robert offers to reduce his commission by .5% to make the bid more attractive. If the bid price is $140,000 and the Asset Manager offers 5% total commission on the property, what would Robert`s final commission be? A. $7,000 B. $3,500 C. $3,150 D. $2,800 Congratulations, this is the correct answer! 8. Pauline wants to buy a HUD home as a primary residence. She has received a pre-qualification letter from her bank to purchase a property up to $150,000. Which of the following is a TRUE statement about Pauline? A. Pauline can purchase only properties with FHA financing. B. Pauline can purchase HUD homes regardless of the condition. Congratulations, this is the correct answer! C. Pauline can purchase only HUD homes that are insurable. D. Pauline can purchase HUD homes for $1. 9. Kim has a 2 bedroom house, which she bought with an FHA loan. She was unable to make the mortgage payments and the lender foreclosed on the property. The lender was unable to sell the property to another buyer. If the lender filed a claim against the mortgage insurance, who would have the legal ownership of the house? A. Kim B. The Lender C. A third party trustee D. HUD Congratulations, this is the correct answer!

Which of the following is a duty of a Field Service Manager (FSM)? A. Analyzing market and property conditions B. Representing the interests of HUD during the transaction C. Maintaining HUD homes, such as landscaping, pest control, etc., while the home is in HUD?s possession Congratulations, this is the correct answer! D. Following HUD procedures in marketing properties for sale 2. Which of the following is a duty of an Asset Manager (AM)? A. Inspecting properties B. Preparing properties for sale C. Handling payments of regular costs, such as utilities, HOA fees, assessments, ground rents, etc. This was your answer, which is incorrect. D. Representing the interests of HUD during the transaction This is the correct answer Feedback: Asset Managers (AMs) represent the interests of HUD during the transaction. This was discussed in Unit 1, Chapter 2, Lesson 1. 3. Your client, Tasha, is interested in making an offer on a HUD home. Tasha asks you whether anyone has been paying utilities and HOA fees, and maintaining the landscaping. What should you tell her? A. "A Field Service Manager (FSM) has been paying utilities and HOA fees and maintaining the landscaping." Congratulations, this is the correct answer! B. "An Asset Manager (AM) has been paying utilities and HOA fees, and maintaining the landscaping." C. "A Mortgagee Compliance Manager (MCM) has been paying utilities and HOA fees and maintaining the landscaping." D. "An Oversight Monitor (OM) has been paying utilities and HOA fees, and maintaining the landscaping." 4. You just started working with Jordan and Jack, new clients who are interested in buying their first home. You`ve recommended they meet with a lender and get a loan pre-approval letter. They ask if you know anything about FHA loans. What should you tell them? A. The FHA insures loans for borrowers. Because of this B. The FHA insures loans for lenders. Because of this insurance, lenders are more willing to extend credit. The FHA developed the 30-year fully amortizing fixed-rate loan program. Congratulations, this is the correct answer! C. The FHA insures loans for lenders. Because of this insurance, lenders are more willing to extend credit. The FHA developed the 25-year fully amortizing adjustable-rate loan program. D. The FHA insures loans for borrowers. Because of this insurance, lenders are more willing to extend credit. The FHA developed the 20-year fully amortizing adjustable-rate loan program. 5. What was passed in 1998, requiring lenders to cancel their mortgage insurance requirement when a loan`s principal balance reaches 78% of the home`s purchase price? A. FHA B. Homeowners Protection Act Congratulations, this is the correct answer! C. HUD D. Equal Credit Opportunity Act 6. Which of the following is FALSE regarding bid cancellations? A. A buyer can cancel a bid at any point until the bid has been accepted. B. A buyer can cancel a bid at any point, even after the bid has been accepted. This is the correct answer C. If the buyer is not going to close on the sale, the Selling Broker is required to contact the Asset Manager and the Closing Agent as soon as possible. This was your answer, which is incorrect. D. Requests for the return of earnest money need to be provided in writing and accompanied by any documentation supporting the reason for the cancellation. Feedback: A buyer can cancel a bid online at any point, until the bid has been accepted and the contracts are accepted by the Asset Manager. After that, the contract is binding. This was discussed in Unit 3, Chapter 1, Lesson 1. 7. An agent in your brokerage firm, Trista, asks you who can sell HUD homes. What should you tell her? A. "Any licensed real estate broker (or their agents) who has registered with HUD can find buyers for these homes and submit bids through an electronic bid process. If you want to register to sell HUD homes, you must follow specific steps outlined by HUD." Congratulations, this is the correct answer! B. "Any licensed real estate broker (or their agents) can find buyers for these homes and submit bids through an electronic bid process." C. "If you want to register to sell HUD homes, you must follow specific steps outlined by HUD. Then you must submit bids in writing." D. "Any licensed real estate broker (or their agents) can find buyers and submit bids for these homes. There is nothing you will need to do to be eligible for selling HUD homes." 8. What does it mean if a property is a IE (Insurable-Escrow Listing)? A. The property is in sufficiently good condition to qualify to be the collateral for an FHA 203(b) loan. This is the most common and simplest type of FHA loan. This was your answer, which is incorrect. B. The property is estimated to need more than $5,000 in repairs and is not eligible for FHA 203(b) loan, but may be eligible for 203(k) loan. C. The property is estimated to need less than $5,000 in repairs. The purchaser closes and uses funds in escrow (from loan proceeds) to make repairs. The amount is added to loan balance and could be eligible for FHA 203(b) loan. This is the correct answer D. The property will be sold for $1. Feedback: An IE, or Insurable-Escrow Listing, property is estimated to need less than $5,000 in repairs. The purchaser closes and uses funds in escrow (from loan proceeds) to make repairs. The amount is added to loan balance and could be eligible for FHA 203(b) loan. This was discussed in Unit 2, Chapter 1, Lesson 4. 9. You are an independent contractor hired by HUD to list and sell HUD homes within your assigned geographic area. Which of the following best describes your role? A. "I am a Field Service Manager (FSM)." B. "I am an Asset Manager (AM)." Congratulations, this is the correct answer! C. "I am a Mortgage Compliance Manager (MCM)." D. "I am an Oversight Monitor (OM)."

Which of the following is a duty of a Field Service Manager (FSM)? A. Analyzing market and property conditions B. Representing the interests of HUD during the transaction C. Maintaining HUD homes, such as landscaping, pest control, etc., while the home is in HUD?s possession Congratulations, this is the correct answer! D. Following HUD procedures in marketing properties for sale 2. Which of the following is a duty of an Asset Manager (AM)? A. Inspecting properties B. Preparing properties for sale C. Handling payments of regular costs, such as utilities, HOA fees, assessments, ground rents, etc. This was your answer, which is incorrect. D. Representing the interests of HUD during the transaction This is the correct answer Feedback: Asset Managers (AMs) represent the interests of HUD during the transaction. This was discussed in Unit 1, Chapter 2, Lesson 1. 3. Your client, Tasha, is interested in making an offer on a HUD home. Tasha asks you whether anyone has been paying utilities and HOA fees, and maintaining the landscaping. What should you tell her? A. "A Field Service Manager (FSM) has been paying utilities and HOA fees and maintaining the landscaping." Congratulations, this is the correct answer! B. "An Asset Manager (AM) has been paying utilities and HOA fees, and maintaining the landscaping." C. "A Mortgagee Compliance Manager (MCM) has been paying utilities and HOA fees and maintaining the landscaping." D. "An Oversight Monitor (OM) has been paying utilities and HOA fees, and maintaining the landscaping." 4. You just started working with Jordan and Jack, new clients who are interested in buying their first home. You`ve recommended they meet with a lender and get a loan pre-approval letter. They ask if you know anything about FHA loans. What should you tell them? A. The FHA insures loans for borrowers. Because of this insurance, lenders are more willing to extend credit. The FHA developed the 10-year fully amortizing fixed-rate loan program. B. The FHA insures loans for lenders. Because of this insurance, lenders are more willing to extend credit. The FHA developed the 30-year fully amortizing fixed-rate loan program. Congratulations, this is the correct answer! C. The FHA insures loans for lenders. Because of this insurance, lenders are more willing to extend credit. The FHA developed the 25-year fully amortizing adjustable-rate loan program. D. The FHA insures loans for borrowers. Because of this insurance, lenders are more willing to extend credit. The FHA developed the 20-year fully amortizing adjustable-rate loan program. 5. What was passed in 1998, requiring lenders to cancel their mortgage insurance requirement when a loan`s principal balance reaches 78% of the home`s purchase price? A. FHA B. Homeowners Protection Act Congratulations, this is the correct answer! C. HUD D. Equal Credit Opportunity Act 6. Which of the following is FALSE regarding bid cancellations? A. A buyer can cancel a bid at any point until the bid has been accepted. B. A buyer can cancel a bid at any point, even after the bid has been accepted. This is the correct answer C. If the buyer is not going to close on the sale, the Selling Broker is required to contact the Asset Manager and the Closing Agent as soon as possible. This was your answer, which is incorrect. D. Requests for the return of earnest money need to be provided in writing and accompanied by any documentation supporting the reason for the cancellation. Feedback: A buyer can cancel a bid online at any point, until the bid has been accepted and the contracts are accepted by the Asset Manager. After that, the contract is binding. This was discussed in Unit 3, Chapter 1, Lesson 1. 7. An agent in your brokerage firm, Trista, asks you who can sell HUD homes. What should you tell her? A. "Any licensed real estate broker (or their agents) who has registered with HUD can find buyers for these homes and submit bids through an electronic bid process. If you want to register to sell HUD homes, you must follow specific steps outlined by HUD." Congratulations, this is the correct answer! B. "Any licensed real estate broker (or their agents) can find buyers for these homes and submit bids through an electronic bid process." C. "If you want to register to sell HUD homes, you must follow specific steps outlined by HUD. Then you must submit bids in writing." D. "Any licensed real estate broker (or their agents) can find buyers and submit bids for these homes. There is nothing you will need to do to be eligible for selling HUD homes." 8. What does it mean if a property is a IE (Insurable-Escrow Listing)? A. The property is in sufficiently good condition to qualify to be the collateral for an FHA 203(b) loan. This is the most common and simplest type of FHA loan. This was your answer, which is incorrect. B. The property is estimated to need more than $5,000 in repairs and is not eligible for FHA 203(b) loan, but may be eligible for 203(k) loan. C. The property is estimated to need less than $5,000 in repairs. The purchaser closes and uses funds in escrow (from loan proceeds) to make repairs. The amount is added to loan balance and could be eligible for FHA 203(b) loan. This is the correct answer D. The property will be sold for $1. Feedback: An IE, or Insurable-Escrow Listing, property is estimated to need less than $5,000 in repairs. The purchaser closes and uses funds in escrow (from loan proceeds) to make repairs. The amount is added to loan balance and could be eligible for FHA 203(b) loan. This was discussed in Unit 2, Chapter 1, Lesson 4. 9. You are an independent contractor hired by HUD to list and sell HUD homes within your assigned geographic area. Which of the following best describes your role? A. "I am a Field Service Manager (FSM)." B. "I am an Asset Manager (AM)." Congratulations, this is the correct answer! C. "I am a Mortgage Compliance Manager (MCM)." D. "I am an Oversight Monitor (OM)."

. Jane submitted a bid on a HUD home. Her bid was not accepted, but she was notified that her bid is within an acceptable range and is in a group of finalists. What can Jane do at this point if she still wants the property? A. Jane can cancel the bid and resubmit a new one. B. Jane can wait until the Asset Manager has no other choice but to accept her bid. C. Jane can buy the property at her given bid. D. Jane can submit a counter offer to be considered for acceptance. Congratulations, this is the correct answer! 2. Amber is a registered Selling Broker and has a buyer with whom she has an independent Buyer Brokerage Agreement. The agreement states that the buyer will pay Amber`s fees regardless of the properties purchased. If Amber`s client purchases a HUD home with a 5% total commission, how much of that commission would Amber receive? A. 5% B. 3% C. 2.50% D. 0% Congratulations, this is the correct answer! 3. Tabitha is bidding on a HUD home. Which of the following is NOT required as part of the electronic bidding process? A. Completing the HUD Sales Contract 9548 B. The Selling Broker`s NAID number C. Tabitha`s Home Inspection Report Congratulations, this is the correct answer! D. Tabitha`s disclosure of whether or not she will be occupying the property 4. Connie is a registered Selling Broker. Her client`s bid was accepted. How long does the client have to perform all home inspections? A. Five days from the acceptance date B. 15 days from the acceptance date Congratulations, this is the correct answer! C. 30 days from the acceptance date D. Up until closing 5. Wilma is purchasing a HUD home and paid $1,500 for an earnest money deposit. After 45 days, Wilma did not perform in accordance with the contract and the sale has not closed. There are no documented special circumstances. What would happen to that $1,500? A. Wilma would have the funds returned. B. Wilma would forfeit the entire $1,500. Congratulations, this is the correct answer! C. Wilma would forfeit 50% of the earnest money deposit. D. Wilma would forfeit 25% of the earnest money deposit. 6. Charlotte is a registered Selling Broker and is submitting a bid for her client. Which of the following could cause the bid to be cancelled? A. The bid is less than the listing price. B. The bid includes Charlotte`s NAID number. C. The names on the sales contract and the electronic bid are identical. D. The social security number on the sales contract is different than the one posted on the electronic bid. Congratulations, this is the correct answer! 7. Which of the following is NOT included in the electronic bid? A. Purchase Type B. The commission percentage of the Selling Broker C. The bid price D. Name of the buyer`s home inspector Congratulations, this is the correct answer! 8. Bernie is a Local Listing Broker and also a registered Selling Broker. His state allows for dual agency. Which of the following is TRUE? A. Bernie can only be a Local Listing Broker. He cannot represent both parties in the same transaction. B. Bernie can only be a Selling Broker. He cannot represent both parties in the same transaction. C. Bernie can list the property and find buyers, representing both parties in the same transaction, as long as he gives the parties the proper disclosures. Congratulations, this is the correct answer! D. Bernie can list the property and find buyers. No disclosures are necessary. 9. Denise found four HUD properties that she likes and wants to bid on as an owner occupant buyer. How many of these properties can she bid on at one time? A. one B. two C. three D. four Congratulations, this is the correct answe

Your clients, Mr. and Mrs. Davis, are interested in making an offer on a HUD home that is in its Extended Sales Period. Which of the following is TRUE? A. Only buyers who are planning to use the property as their primary residence can bid during the Extended Sales Period. B. During the Extended Sales Period, bids are accepted from non-owner occupant bidders, investors, or any other qualified bidders. Qualified nonprofits and government entities are entitled to purchase properties at a discount during this period. Congratulations, this is the correct answer! C. Only buyers who are planning to use the property as a vacation home or investment property can bid during the Extended Sales Period. D. Only buyers who have been pre-approved for FHA financing can bid during the Extended Sales Period. 2. Your client, Kristy, made an offer on a HUD home. The offer was accepted and Kristy wants to know if she can begin using the property. What should you advise Kristy about when she can begin using the property? A. Kristy cannot take possession of the property until the sale is closed. The title is not transferred until closing. Congratulations, this is the correct answer! B. Kristy can begin using the property as soon as her offer is accepted. C. Kristy cannot take possession of the property until she has the keys. D. Kristy can begin using the property when she pays her down payment. 3. Your client, Chloe, wants to make an offer on a HUD home. Chloe wants to know what will be the first step in submitting an electronic bid. What should you tell her? A. She will need to complete the HUD Sales Contract 9548 and all supporting addenda prior to submitting her bid. Congratulations, this is the correct answer! B. She will need to make an offer to the Asset Manager prior to submitting an electronic bid. C. She will need to complete the HUD-1 and all supporting addenda prior to submitting her bid. D. She will need to obtain a copy of her completed 1003 application prior to submitting her bid. 4. Properties that are in sufficiently good condition to qualify to be the collateral for an FHA 203(b) loan (the most common and simplest type of FHA loan) are what type of property? A. IN, Insurable Listing Congratulations, this is the correct answer! B. IE, Insurable-Escrow Listing C. UI, Uninsurable Listing D. UE, Uninsurable Escrow Listing 5. If you want to register to sell HUD homes, you must: _______. A. Become a Local Listing Broker This was your answer, which is incorrect. B. Become an Asset Manager (AM) C. Sign HUD`s Selling Broker Certification forms This is the correct answer D. Do nothing; you are eligible to sell HUD homes with your license Feedback: Any licensed real estate broker (or their agents) who has registered with HUD can find buyers for HUD homes and submit bids through an electronic bid process. If you want to register to sell HUD Homes, you must sign HUD`s Selling Broker Certification forms. This was discussed in Unit 1, Chapter 2, Lesson 2. 6. Your client, Sam, made an offer on a HUD home. Sam wants to know who is considering his bid. What should you tell him? A. As soon as Sam`s bid is posted, the Asset Manager will evaluate each bid to determine the highest acceptable net offer to HUD. Congratulations, this is the correct answer! B. As soon as Sam`s bid is posted, the FHA will consider Sam`s bid. C. As soon as Sam`s bid is posted, the Asset Manager will evaluate each bid to determine the highest acceptable offer to submit to the lender. D. As soon as Sam`s bid is posted, HUD will consider Sam`s bid and tell the Asset Manager their decision. 7. An agent in your brokerage firm, Trista, asks you who can sell HUD homes. What should you tell her? A. "Any licensed real estate broker (or their agents) who has registered with HUD can find buyers for these homes and submit bids through an electronic bid process. If you want to register to sell HUD homes, you must follow specific steps outlined by HUD." This is the correct answer B. "Any licensed real estate broker (or their agents) can find buyers for these homes and submit bids through an electronic bid process." C. "If you want to register to sell HUD homes, you must follow specific steps outlined by HUD. Then you must submit bids in writing." This was your answer, which is incorrect. D. "Any licensed real estate broker (or their agents) can find buyers and submit bids for these homes. There is nothing you will need to do to be eligible for selling HUD homes." Feedback: Any licensed real estate broker (or their agents) who has registered with HUD can find buyers for these homes and submit bids through an electronic bid process. If you want to register to sell HUD homes, you must follow specific steps outlined by HUD. This was discussed in Unit 1, Chapter 2, Lesson 2. 8. An agent in your brokerage, Kerry, is advertising a HUD home. Which of the following is Kerry NOT required to do? A. Include the Equal Housing Opportunity logo on her Internet ad. This was your answer, which is incorrect. B. State that the property will be sold ?as is? and that there is no guarantee or warranty of property condition. C. Take out an advertisement that says, "HUD Foreclosed Home For Sale!" This is the correct answer D. Advertise the listed price as quoted on the MLS. Feedback: As a registered broker with HUD, you can market, promote, and advertise any HUD home listed on the MLS. However, HUD has established some specific rules regarding the marketing and advertising. Included in these rules is that "HUD Foreclosed" is not approved advertising wording. This was discussed in Unit 2, Chapter 1, Lesson 5. 9. An agent in your brokerage is interested in selling HUD homes. Which of the following does the agent NOT need to do to be eligible? A. Sign HUD`s Selling Broker Certification forms. B. Attach required documentation, such as a copy of your broker`s license, IRS documentation, a copy of your driver`s license, and your utility bill or phone bill. This was your answer, which is incorrect. C. Renew your registration annually or when any changes are made to the name or address of the broker. D. Become an Asset Manager (AM). This is the correct answer Feedback: The agent does NOT need to become an Asset Manager (AM) in order to sell HUD homes. This was discussed in Unit 1, Chapter 2, Lesson 2.

Compensation for Listing and/or Selling To encourage brokers to sell HUD homes, the selling agent and the listing agent may each receive up to 3 percent commission (6 percent in total), based on the sales price of the property. However, the percentage of commission is determined by the Asset Manager (AM) based on the salability of the home and the market conditions. AMs are judged based on the total revenue returned to HUD, so if they can sell homes with lower commissions, then it is in their prerogative to do so. The commission will be stated on the MLS listing.

he commission for a property is shared equally between the Local Listing Broker and the Selling Broker. If, in the negotiations with the buyer, the Selling Broker chooses to reduce their commission to secure the sale, they can only reduce their portion of the commission. For example, let's say a property has a total commission of 5 percent. In this case, 2.5 percent would be given to the Local Listing Broker and 2.5 percent to the Selling Broker. If the Selling Broker decided to reduce the commission by ½ percentage point, this would be deducted only from the Selling Broker's part of the total commission, so the Local Listing Broker would still receive 2.5%, but the Selling Broker would receive 2%. Note Only licensed, registered real estate brokers and their agents can receive commissions on HUD home sales. Asset Managers (AMs), Local Listing Brokers, Selling Brokers, and their employees or immediate family members, cannot directly or indirectly receive any form of payment, income, revenue, compensation, or anything else of value from any person or entity, other than HUD or the AM in performance of his/her duties in a HUD home transaction. In some instances, the AM may retain the services of a Broad Listing Broker (BLB) to aide in the distribution of assets. A BLB assists the AMs in managing the functions of the Local Listing Brokers (LLB). When a BLB is used, a portion of commissions may be directed to the BLB for their services. Please consult with your AM to determine if a BLB will be used in your area.

Listing and Selling HUD Homes (h)

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