FHA Single Family Housing Policy Handbook 4000.1, IV. CLAIMS AND DISPOSITION > B. Title II Disposition > 2. REO Property Disposition — i. Selection of Winning Bid

hud-4000-1-iv-i-selection-of-winning-bid

HUD effective date: 01/02/2020 · section IV.B.2 · Handbook 4000.1

FHA Single Family Housing Policy Handbook 4000.1, Part IV — i. Selection of Winning Bid (01/02/2020).

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Verbatim provisions from FHA Single Family Housing Policy Handbook 4000.1, IV. CLAIMS AND DISPOSITION > B. Title II Disposition > 2. REO Property Disposition — i. Selection of Winning Bid — each quote is a verified substring of the regulator-published source snapshot, not retyped. Quoted for reference; this is not legal advice. The operational layer (P&P updates, prompts) lives in the regulation update kits.

FHA Single Family Housing Policy Handbook 4000.1, Part IV — i. Selection of Winning Bid (01/02/2020)

Effective 2020-01-02 · publisher's stamp for this provision

5 sections · 6,917 characters of verbatim text. Open a section to read it, or . Every section below is in the page source whether open or closed.

iSelection of Winning Bid (01/02/2020)157 ch
i. Selection of Winning Bid (01/02/2020) i. Notification by HUD of Winning Bid HUD will alert the buyer or selling broker if they are the winning bidder.
iiSubmission of Sales Documents1,272 ch
ii. Submission of Sales Documents Once HUD has notified the buyer or selling broker that they are the winning bidder, the buyer or selling broker must send the following to the AM within two business days: • a fully completed form HUD-9548, signed by the buyer and selling broker; • a pre-qualification letter, certification of cash funds, or other proof of funds; and • all required addenda, if applicable, including: o a Purchase Addendum for Individual Owner-Occupant Buyers or an Exclusive Listing Period Purchase Addendum for Governmental Entities and HUD- Approved Nonprofits; o a forfeiture of earnest money deposit addendum; o a Buyer Select Closing Agent Addendum; o closing instructions and certification; o form HUD-9548-B, Discount Sales Addendum; o all copies of form HUD-9545-Y and/or form HUD-9545-Z providing the original Addendum and any Supplemental Addenda; o form HUD-92564-CN, For Your Protection: Get a Home Inspection; o Good Neighbor Next Door addenda; o a flood zone property addendum; and o any disclosures required by state or local law. The selling broker must complete Line 3 of form HUD-9548 to identify the Closing Agent as the party who will be holding the earnest money deposit, unless otherwise instructed by the AM.
iiiEarnest Money Deposit4,923 ch
iii. Earnest Money Deposit28 ch
iii. Earnest Money Deposit
ADefinition177 ch
(A) Definition The Earnest Money Deposit is a buyer’s deposit toward the purchase of real estate to demonstrate that they are serious about wanting to complete the purchase.
BStandard415 ch
(B) Standard The buyer and selling broker must sign the earnest money forfeiture agreement. The selling broker must submit the earnest money deposit with the completed form HUD- 9548, for all sales other than ACA sales, to the AM within two business days of being notified that their buyer is the winning bidder, unless otherwise instructed by the AM, and the AM will forward the deposit to the Closing Agent.
CForm of Earnest Money Deposit936 ch
(C) Form of Earnest Money Deposit The earnest money deposit must be in the form of a cashier’s check, certified check, or money order with no termination date or cancellation provision, payable to the Closing Agent or to another entity as designated by HUD. Earnest Money Deposit Amounts The earnest money deposit amount is as follows: • for Properties with a sales price of $50,000 or less, the earnest money deposit is $500; • for Properties with a sales price greater than $50,000, the earnest money deposit is between $500 and $2,000, as determined by HUD; • for vacant lots, the earnest money deposit is 50 percent of the list price; and • for Properties to be purchased under the GNND Sales Program, the earnest money deposit is 1 percent of the list price, but no less than $500 and no more than $2,000. The buyer or selling broker may contact the AM for the earnest money deposit amount for a specific Property.
DDisposition of Earnest Money Deposits When the Transaction Fails to Close2,861 ch
(D) Disposition of Earnest Money Deposits When the Transaction Fails to Close540 ch
(D) Disposition of Earnest Money Deposits When the Transaction Fails to Close Should the sales transaction fail to close as scheduled, HUD may consider the earnest money deposit forfeited or may return all or a portion of the earnest money deposit. (1) Investor Buyer Forfeiture of Entire Earnest Money Deposit Subject to state law, the Investor Buyer forfeits 100 percent of the earnest money deposit, unless HUD cancels the sales contract due to HUD’s inability to close the transaction for any reason. (2) Owner-Occupant Buyers
aReturn of Entire Earnest Money Deposit1,667 ch
(a) Return of Entire Earnest Money Deposit Subject to state law, HUD will return 100 percent of an Owner-Occupant Buyer’s earnest money deposit in the following circumstances: • there has been a death in the immediate family (contract holder, spouse, or children living in the same household); • there has been a recent serious illness in the immediate family that has resulted in significant medical expenses or substantial loss of income, thus adversely affecting the buyer’s financial ability to close the sale; • there has been a loss of job by one of the primary wage earners, or substantial loss of income through no fault of the buyer; • on an insured sale, HUD determines that the buyer is not an acceptable Borrower; • on an uninsured sale, the buyer was pre-approved for FHA-insured mortgage financing in an appropriate amount by a recognized Mortgagee but, despite good faith efforts, was ultimately unable to secure mortgage financing; • within 30 Days of the contract ratification date, the buyer has provided to the AM written documentation from a lender supporting the buyer’s inability to secure financing; • HUD cancels the contract due to the documented presence and/or condition of lead-based paint and/or lead-based paint hazards; • pursuant to the terms of the VA Amendatory Clause for purchasers using VA financing; or • other circumstances evidencing equally good cause, as determined by HUD. In order to receive any part of the earnest money deposit, the Owner-Occupant Buyer must submit documentation to the AM within allowed time limits evidencing the circumstances related to the transaction’s failure to close.
bForfeiture of Entire Earnest Money Deposit654 ch
(b) Forfeiture of Entire Earnest Money Deposit Subject to state law, the buyer forfeits 100 percent of the earnest money deposit in the following circumstances: • the buyer does not submit documentation supporting their reason for the return of any part of the earnest money deposit within 30 Days, or such other time allowed by the AM in writing, following contract cancellation; or • the buyer’s submitted documentation fails to support an acceptable cause for the buyer’s failure to close. (3) Vacant Lots Subject to state law, buyers of vacant lots will be considered Investor Buyers for the purpose of earnest money deposit disposition.
EFailure to Abide by HUD’s Earnest Money Policy506 ch
(E) Failure to Abide by HUD’s Earnest Money Policy Listing brokers who fail to comply with HUD’s instructions for the collection and forwarding of the earnest money deposit to the AM (or other party as instructed by the AM) may be subject to such action including: • Limited Denial of Participation (LDP); • notification of the state real estate commission or regulatory body; • referral to the appropriate office(s) for enforcement review; and/or • suspension or termination of the Broker’s NAID.
ivFailure to Submit Sales Documents261 ch
iv. Failure to Submit Sales Documents Should the winning bidder fail to submit a ratified sales contract and accompanying documentation and deposits within allowed time limits, the AM may offer the Property to back-up bidders before relisting the Property.
vElectronic Signatures304 ch
v. Electronic Signatures The use of electronic signatures is voluntary. HUD will permit the use of electronic signatures conducted in accordance with the Policy on Use of Electronic Signatures on the HUD REO form HUD-9548 and related addenda requiring signatures, unless otherwise prohibited by law.

Source: FHA Single Family Housing Policy Handbook 4000.1, Update 18 (issued 2026-08-12) · source URL · snapshot e1bca3432cf19e09

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