what needs to be done to sell a HUD home?

Question

I'm in the process of buying a home. All the financing is done and we were suppose to close tommarrow, But then the title co. said the title on the house isn't clear. That it was sold to the current owner as a HUD home and she needs approval from HUD to sell the house. Has anyone delt with anything like this?? If so I need input. I have already sold my home and need to move ASAP

I am not buying the house as a HUD home,I am purchacing it with standard financing. The Owner Had the house financed as a HUD home, and she has lived in it for 15 years.

Answer 1

On the HUD forclosures, if you buy it as an "owner occupant", you are committing to living there for at least 12 months. If you buy as an "investor", you can sell it later that day. HUD gives preference to "owner occupants".

If she bought the house less than 12 months ago as an owner occupant, then HUD allowed her to have the house - ahead of even investors who bid higher - based upon her saying she was going to live there (cannot rent it out either).

Don't blame the title company, or the lender. They would not have been told about this quickly anyhow. Do blame the seller if this is the case. Her Realtor too, if he sold her the house and knew what was going on. (If that's the case, hopefully he'll lose his registration to sell HUD homes.)

Answer 2

you need to contact the last owner and contact HUD in your area to see if they approve of her selling the home. The seller should have known this before she listed the house on the market. If HUD says that she can't sell the house you are stuck. You could sue the house owner though for money your out because she lied about the house being able to be sold. I don't really understand why you got financing before you cleared the title. So you learned something, clear the title first, then get financing and close. Sorry it has to be such a rough lesson, you should start looking for another house.