FOUNDATION CERTIFICATION
FREE APPRAISAL REPORT
OR CALL DEBBIE NOW AT 828-726-9180
HOW THE HUD PROCESS WORKS!
WHAT IS A HUD HOME? A HUD home is a home sold utilizing a FHA guaranteed loan where the owner defaulted, was taken back by the bank and then deeded by the bank to The Department of Housing and Urban Development or HUD for disposition. HUD Utilizes the services of Management and Marketing companies (M&Ms) to manage the process and sell the homes on their behalf.
HOW MANY HUD HOMES ARE THERE AND HOW DO I FIND THEM? With the current rash of mortgage defaults, there are more HUD homes on the market now than at any time since the mid 90's. To find a HUD home near you, click on CURRENT HUD LISTINGS! You can search every county in North Carolina for available properties. AND! If you find a property of interest... CALL DAN TODAY AT 828-850-0138!
WHAT ARE THE MAIN PROS & CONS TO BUYING A HUD HOME? The major PRO is pricing. It is very expensive for HUD to keep a home in its inventory. As such, they price them to sell relatively quick and act quickly to reduce the price to get it out of inventory. Most HUD homes in our area sell within the first 24 days of being listed. If it has not sold within this time frame, HUD is aggressive in their bid acceptance to insure it is sold. The biggest CON is that they are sold "AS IS"! BUT! HUD gives you every opportunity to have inspections performed on the home.
BUT PLEASE NOTE! THERE ARE NO WARRANTIES AND IF THERE IS A PROBLEM AFTER CLOSING... YOU OWN IT!
Purchasers are advised that the properties may contain code and/or zoning violations. HUD's contract requires its M&M contractors to identify any and all known defects, code and/or zoning violations in the Property Condition Report. BUT! There may be oversights. As such, HUD strongly recommends all buyers perform inspections of all of the homes systems.
ONCE YOU OWN IT, YOU OWN ITS PROBLEMS AS WELL!
All HUD HOMES ARE SOLD "AS IS - WHERE IS" WITHOUT A WARRANTY OR GUARANTY!
HOW DO I KNOW IF THERE IS A PROBLEM WITH ONE OF THE HOME'S SYSTEM? HUD and its M&M's
DO NOT make any guaranties and/or warranties concerning any HUD property. No repairs will be performed by HUD after closing. HUD's M&M will ensure that prior to execution of a sales contract, all available property condition information will be disclosed in the HUD Property Condition Report and HUD Property Environmental Compliance Record. Purchasers are encouraged to have the properties inspected by a qualified home inspection service company to satisfy themselves as to the condition of the property. Purchasers have 15 calendar days from the date of the Purchaser's signature on the sales contract to conduct, at the purchaser's expense, any inspections, tests or risk assessments desired by the Purchaser.
NOTE! When we are in the
"Winterized Period". You will need to pay HUD $60 at the time of the offer to cover the cost of re-winterizing the home after inspections. This is not an option for any purchaser seeking FHA financing. All lenders will require a systems check which will require the water being turned on.
HOW DO I GET IN TO SEE A HUD HOME AND WILL THEY ASSIST WITH CLOSING COSTS? You must contact a
HUD CERTIFIED AND AUTHORIZED Broker such as
THE BOONE CREW to visit listed homes and/or to make an offer. HUD will pay selective closing costs up to 3% of the purchase price, If the closing costs are included in the bid and inserted on the appropriate line of the sales contract.
AND! If you find a property of interest...
CALL THE BOONE CREW TODAY AT 828-726-9180! We can walk you through the process and explain which closing costs are allowable and the maximum amount allowed by HUD in North Carolina. You may also obtain a copy of HUD's "buyer's kit" on the Internet at
www.hud.gov
WHAT DOES IT MEAN ON THE CONTRACT WHEN IT SAYS INSURED - UNINSURED OR INSURED WITH ESCROW?
Listing Codes:
IN - Insured:
All properties listed as "INSURED" are eligible for FHA financing. These properties are eligible for insurance under Section 203(b) of the National Housing Act. An interest rate will be charged on the loan and is negotiable between the purchaser and lender. The mortgage may include some mortgage insurance payments. The originating lender is responsible for making final determination whether a property meets Minimum Property Standards and, consequently, is eligible for FHA insurance.
IE - Insured with Escrow Repairs:
Properties listed as "Insurable with Repair Escrow" are eligible for an FHA 203(b) insured loan. The lender making the new FHA 203(b) loan establishes an escrow for the amount of the repairs which includes a 10% contingency, not to exceed $5,500. The identified repairs are required to meet FHA's "minimum property standard" (MPS) and the total repair costs should be equal to or less than $5,000. If a 203(b) FHA insured loan is used for financing, the repair escrow must be used for the needed work specified in the listing.
Repairs must be accomplished within 90 days of closing and be monitored by an FHA lender. The lender will inspect work as it is completed on the house and distribute the repair monies as appropriate within ninety (90) days of closing. The costs of repairs are included in the loan amount and repaid by the borrower as part of the monthly payment. Any funds in the escrow account not used for the repairs will be applied to reduce the unpaid principal balance of the loan. The escrow does not apply if the buyer is not utilizing FHA loan financing.
UI - Uninsured:
Properties listed as "UNINSURED" means that certain repairs and or improvements are required to be eligible for an FHA 203(k) mortgage. The required repairs on most of these properties exceed $5000.00. Purchasers of these properties have the option to purchase "as-is" with cash or conventional financing. These properties maybe eligible for a FHA 203(k) mortgage if the required repairs and or the improvements are completed in accordance with FHA guidelines. Ask a FHA lender for more details.
WHAT IS THE PROPERTY CONDITION REPORT AND WHAT ALL DOES IT DISCLOSE?
HUD's M&Ms are required to prepare a HUD Property Condition Report for each property. Prior to completing a property appraisal, the M&M will prepare and provide to the appraiser a comprehensive property condition report that provides potential purchasers with any information known to HUD that may affect the habitability, functionality or value of the property, including but not limited to: the functionality of all heating, cooling, plumbing, gas and electrical systems and appliances; outstanding code violations, pending litigation, demolition orders, other legal actions that may impact the property or violations of Homeowner's Association covenants that are known to HUD and that will not be resolved prior to closing; condition of the septic system or well; existing transferable warranties; copies of Homeowner's Association documents; the Environmental Compliance Record, the lead based paint disclosure, and the mold disclosure. The completed HUD Property Condition Report will be posted in the property file and will be made available to prospective purchasers on-line through the Internet Property Listing.
WHEN AND HOW ARE THE HOMES LISTED, WHO IS ELIGIBLE TO BID ON A HUD HOME AND HOW DO I SUBMIT A BID?
New listings are available weekly on Friday mornings. During the Initial listing period (The first 10 calendar days), bids may be submitted by Owner Occupants only.
Owner Occupant Priority Period.
All Owner-Occupant offers received during this 10 day Exclusive Listing, are considered to have been received simultaneously. In order to be valid for the period, bids must be submitted by an
AUTHORIZED AND CERTIFIED HUD BROKERS and confirmed by HUD on the Internet.
Owner-Occupant bids will be opened and reviewed and the highest acceptable net bid to HUD will be selected. Bids will be reviewed and posted by 1:00 p.m at the conclusion of the 10 day Exclusive listing period.
General Public Bid Period:
At the conclusion of the 10-day Owner Occupant Exclusive Priority Period, if no acceptable bid has been offered, the process will be opened to all bidders on a daily review basis. These bids are reviewed each day and the highest acceptable net bid to HUD will be selected. In the event the property remains unsold after that days bid openings, daily bids received by 11:59 p.m. will be reviewed and results will be posted the next day at 1:00 p.m.
Bids received on the same day shall be considered to have been received simultaneously.
Friday, Saturday and Sunday bids will be reviewed simultaneously on Mondays and the results posted by 1:00 p.m. and if there is an acceptable net bid, HUD will select it. Again, if there is no acceptable bid, the process will continue until there is. After 21 days, HUD usually reduces the asking bid price on the home. At this point, the home is placed back on a 10 day priority period for owner occupants only.
Bids can only be submitted by an
AUTHORIZED AND CERTIFIED HUD BROKERS and their Agents and Brokers must submit bids through Internet bidding on HUD's M&M web site.
NOTE: HUD reserves the right to waive any irregularity in any bid, reject any and all offers, and to withdraw a property at anytime.
Sales Contract Submission:
AUTHORIZED AND CERTIFIED HUD BROKERS are required to review bid announcements to verify if their offer was the selected offer. Brokers must submit the original HUD Sales Contract along with all necessary addenda within 48 hours after the announcements are posted. To be acceptable, hard copies must contain no errors and all signatures and initials must be in blue ink.
REMINDER: AUTHORIZED AND CERTIFIED HUD BROKERS must check the web site on a daily basis for available properties and bid announcements. If your bid is selected, a completed contract (with the required Addenda) must be in HUD's M&M office within the next 48 hours of Bid Result Publication or it will be considered canceled and the second highest acceptable net bid to HUD will be selected.
NOTE: HUD does not notify the winning bidder or their Agent that their bid was accepted. It is up to the Authorized and Certified HUD Broker to verify each days bid results.
Multiple Bids by same purchaser on same property:
If multiple bids are submitted on the same property on behalf of the same purchaser, only the bid producing the highest net return to HUD will be considered.
MULTIPLE BIDS ON DIFFERENT PROPERTIES BY THE SAME OWNER-OCCUPANT PURCHASER:
HUD allows an owner-occupant to purchase only one property. If a prospective owner-occupant purchaser submits bids on more than one property, the bid will be considered in the following sequence:
If the prospective owner-occupant purchaser's bid is the only acceptable bid on one of the properties, then that bid will be the only one considered. If not, the bid that produces the greatest net return to HUD will be considered and all other bids submitted by that prospective purchaser will be eliminated from consideration.
NOTE: Owner Occupants who purchase a HUD home through the bid process must wait 2 years before they are eligible to bid on another HUD property as an Owner Occupant.
Required Contract Documents:
If your bid is selected, a completed contract (with the required Addenda) must be in our office within the next 48 hours of Bid Results Publication or it will be considered canceled and the second highest acceptable net bid to HUD will be selected. To ensure that you submit an acceptable Sales Contract, please take a moment and ensure that the following are correct: Where Real Estate Agent signatures and/or initials are required, only the broker signs the contract and initials other documents. The purchaser must sign the radon, gas and mold form and lead-based paint addendum. It is MANDATORY that the earnest money be a cashier's check or money order ONLY - no personal checks. Line 9 of the Sales Contract must reflect 45 days. The "other addendum" box on line 11 of the Sales Contract must be checked. All purchasers must initial line 12 of the Sales Contract Line 6b of the Sales Contract MUST BE left blank.
In addition to the sale contract, the Broker must attach the following Addenda:
Lead Paint Addendum, if the property was built prior to 1978.
Notice to Purchasers Addendum when the offered amount exceeds the appraised value at the time the offer is submitted.
Certification of Owner-Occupant, if purchaser is an owner-occupant. HUD Form 9548C General Addendum to Sales Contract.
Letter from a Financial Institution acknowledging that purchaser has funds available for down payment.
Mortgage Pre-Qualification Letter from a lending institution, if the purchase is to be mortgaged, stating that an in-house credit check has been performed and the purchaser has been pre-qualified for a mortgage up to a specified mortgage amount.
Certification from a Financial Institution, if the purchase is cash, stating that funds are available on the day of closing.
Radon Gas and Mold Notice and Release Agreement, FOR YOUR PROTECTION GET A HOME INSPECTION.
AGAIN! If you find a property of interest...
CALL THE BOONE CREW TODAY AT 828-726-9180 and we can walk you through the process and answer any and all questions!
Certification of Owner-Occupant Status:
All bids by owner-occupants, who are purchasing properties listed in the owner-occupant category, must include an Owner-Occupant Certification. Sanctions will be immediately imposed upon Brokers, Agents and Investors found to be abusing the system which include forfeiture of earnest funds, fines and/or imprisonment. Brokers will also be de-certified and could lose their license to sell real estate.
Flood Insurance:
Flood Insurance Notification - The purchaser shall provide the Closing Agent proof of flood insurance as a condition of closing for all improved properties located in a special flood hazard area where flood insurance is available through the National Flood Hazard Insurance Program, even if it is not required by the Purchaser's lender, if any. This requirement does not apply to vacant lots, properties sold to ACA partners that are scheduled for demolition or properties sold without any type of Federal Assistance including, but not limited to discounts, Purchase Money Mortgage's sales incentives and closing cost assistance.
Electronic Bid Withdrawal:
You may withdraw an electronic bid by downloading HUD's electronic Cancellation Form, completing the form and sending via e-mail or fax to the M&M's regional office, no later than 10:00 a.m. on bid opening day. The message must include:
Broker's Name
Tax ID Number or SSN
Agent's name and telephone number
Reason for cancellation
Key information concerning the bid:
Case Number
Address
Bid Confirmation Number
Counteroffer/Backup Offer:
Properties that are listed during the Exclusive and Extended Listing Periods may be eligible for counter offers. If after fifteen (15) calendar days of the 30 day Initial Listing Period we have not received an acceptable offer, HUD may extend a counteroffer if the original offer meets certain criteria approved by HUD. HUD will notify the selling agent or broker in writing of the predetermined net price that would be acceptable.
HUD will post the counteroffer and the period for resubmitting bids on the website. Brokers will be required to resubmit a second bid online that meets or exceeds the requirement. HUD will review all counter offers in conjunction with the competitive bids submitted prior to the bid deadline. HUD will accept the bid producing the highest acceptable net to HUD and post the acceptable offer in the bid results.
Down payment: Owner Occupants Only:
3% Minimum Down payment for FHA financed properties.
Maximum mortgage amount 97% of the appraised value
or sales price whichever is lower.
Investors:
1 unit: 25% Minimum Down payment, for FHA financed properties;
2 to 4 units: 15% Minimum Down payment, for FHA financed properties.
Earnest Money Deposit:
HUD requires all bids received during the Exclusive or Extended Listing Periods be backed by earnest money in the form of certified funds (Cashiers Check, Official Bank Check, or Money Order only). No later than seventy-two (72) hours following receipt of a signed sales contract, the Selling Broker may be required to deliver the funds to HUD's Closing Agent in accordance with local customs.
Required Earnest Money:
Brokers in NC will hold the money in their Trust Account. Earnest money deposits must be provided in one the following methods: Cashiers Check, Official Bank Check or Money Order only with no termination date or cancellation provision. In North Carolina, earnest money should be made payable to HUD's Closing Agent or the Selling Broker
Required Earnest Money Amount:
$1,000 for offers greater than $50,000; (not to exceed $2000)
$500 for offers $50,000 or less,
50% of the Listing Price for Vacant Lots
Earnest Money Forfeiture and/or Return:
The following provisions are applicable in all instances except those where HUD is unable or unwilling to close the sale, in which case the entire amount will be returned.
Investor Purchasers:
Uninsured Sales: 100% of the deposit will be forfeited to HUD for failure to close, regardless of the reason.
Insured Sales:
50% of the deposit will be forfeited to HUD for failure to close if the purchaser is determined by HUD to be an unacceptable buyer.
100% of the deposit will be forfeited to HUD if the sale fails to close for any other reason.
Owner-occupant Purchasers:
Return 100% of the deposit when:
There has been a death in the immediate family (purchaser, 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 purchaser's financial ability to close the sale.
There has been a loss of job by one of the primary breadwinners, or a substantial loss of income through no fault of the purchaser.
For an FHA insured sale, HUD (or a D.E. underwriter) determines that the purchaser is not an acceptable borrower.
For an uninsured sale, the purchaser was pre-approved for mortgage financing in an appropriate amount by a recognized lender and, despite good faith efforts, is unable to obtain mortgage financing. "Pre-approved" means a commitment has been obtained from a recognized mortgage lender for mortgage financing in a specified dollar amount sufficient to purchase the property.
There is other equally good cause, as determined by HMBI, in keeping with the spirit and intent of the above policy.
Return 50% of the deposit when:
For an uninsured sale, despite good faith efforts by the purchaser, there is an inability to obtain a mortgage loan from a recognized mortgage lender.
Forfeit 100% of the deposit when:
No documentation is submitted.
Documentation fails to provide an acceptable cause for the buyer's failure to close.
Documentation is not received by HMBI no later than close of business on the tenth (10th) day following cancellation of the contract.
Vacant Lot Sales:
The purchaser is considered to be an investor and instructions pertaining to investors will apply.
Appraisal Request:
HUD will provide, at no charge, one copy of the appraisal to the winning bidder for use in obtaining a mortgage loan. If, for any reason, the winning bidder's lender requires a new or updated appraisal report, the cost of that report will be the responsibility of the winning bidder. However, the lender for a winning bidder obtaining any type of FHA insured financing report except a 203(k) rehabilitation mortgage must use the Contractor provided FHA appraisal report unless the report is more than six (6) months old on the date the sales contract is executed.
Closing Costs:
For Sales Contracts executed before October 12, 2006, HUD pays certain Closing Costs up to 5% of the purchase price, IF the closing costs are included in the bid and inserted on line 5 of the sales contract.
HUD does not pay a buyer's closing costs or real estate broker fees on the purchase of property through the OND/TND program.
HUD has issued Notice H-2006-12 in replacement of Notice H-2005-12: For all contracts executed on or after October 12, 2006, HUD will pay up to (and may not to exceed) 3% of all closing costs considered to be reasonable and customary in the jurisdiction where the property is located. If the total closing costs reflected on the HUD-1 settlement statement are less than the amount indicated on the sales contract, HUD will reimburse only the actual costs charged and will not credit the purchaser with any difference either in cash or through a reduced purchase price. Within the three percent (3%) allowance, HUD will reimburse loan origination fees up to one percent of the mortgage. However, on an FHA 203(k) rehabilitation mortgage loan, HUD will reimburse one and a half percent (1.5%) of the mortgage. Click here to review HUD Notice H-2006-12.
Closing Time Frame:
All purchasers must close on or before forty five (45) days of contract acceptance date for all bids submitted.
Closing Extension Policy:
Closing Extension Request: If the closing is not expected to occur on or before the specified time on line 9 of the HUD Sales Contract 9548, the Broker must forward a written extension request to HUD's closing agent prior to the expiration of the time specified on the sales contract. HMBI, as HUD's Representative, may grant an extension of closing time and, if approved, extensions will be granted for a period of fifteen (15) days:
Submit the "Request For Extension of Closing Date" (Extension Request form) and all the required supporting documents to HUD's Closing Agent prior to the expiration of the sales contract. Documentation submitted with the extension request must establish that a closing can reasonably be expected to occur within the extension period. The extension request must be accompanied by a cashier's check, money order or other certified funds in the appropriate amount and made payable to HUD.
The fee is based on the Contract Sales Price: Contract Sales Price equal to or less than $25,000 Extension fee is $10 per day ($150)
Contract Sales Price of $25,001 to $50,000 Extension fee is $15 per day ($225)
Contract Sales Price over $50,000 Extension fee is $25 per day ($375)
The initial 15-day extension will be provided for owner occupant purchasers, at no cost, if documentation is provided indicating that proper and timely loan application was made, that the delayed closing is not the fault of the purchaser and that mortgage approval is imminent. The extension fee will be retained by HUD. In the event that the purchaser closes prior to the end of the extension period, the unused, prorated portion of the extension fee will be credited to the amount due at closing. The approval of an extension does not obligate HMBI, as HUD's Representative, to grant future extensions.
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GOOD NEIGHBOR NEXT DOOR (GNND)
FIREFIGHTER/EMT/OFFICER/TEACHER NEXT DOOR
To make American communities stronger, the U.S. Department of Housing and Urban Development designed the Good Neighbor Next Door (GNND) programs to encourage firefighter, EMT's, police officers and teachers to buy homes in low and moderate-income neighborhoods.
HUD offers a fifty percent (50%) discount off the list price to firefighter, EMT's, police officers and teachers under the terms and conditions described below. To be eligible, firefighters, EMT's, law enforcement officers and teachers must be employed full-time, cannot own any other residential real estate, and agree to make the homes their sole residence for three years following the purchase. In addition, teachers must work in the areas in which the homes are located.
Direct Sales Internet Lottery Process Guidelines
Revitalization Areas
GNND
Rehabilitation Mortgage Insurance (Section 203(k))
FIREFIGHTER/EMT/OFFICER/TEACHER ELIGIBILITY
In an effort to ensure that home ownership opportunities are made available to law enforcement officers who are charged with the responsibility of ensuring the safety and well-being of residents in the communities they serve and to help promote safe neighborhoods by furthering the community law enforcement efforts being made by numerous cities, properties are being made available at a larger discount for sale to law enforcement officers who occupy them as a primary residence for at least three years. Teachers are required to live in the area in which they serve.
This program has now been expanded to include firefighters and EMT's who live in the area in which they serve.
A Law Enforcement Officer is defined as an individual who is:
employed full time by a Federal, State, County or municipal government;
sworn to uphold, and make arrests for violations of, Federal, State, county, or municipal law; and
in good standing with the department.
A Teacher is defined as an individual who is:
employed full time by a a public school, private school, or Federal, State, county or municipal educational agency;
in good standing;
and holds a current State-level certification, as a classroom teacher or administrator in grades K through 12.
A Firefighter/EMT is defined as an individual who is:
employed full time as a firefighter/emergency responder or emergency medical services responder unit of the federal government, a state, a unit of general local government, or an Indian tribal government serving the area where the home is located.
in good standing;
Furthermore, the purchaser may not own residential property for 1 year prior to offer submission and neither may the purchaser's spouse. The purchaser, and his or her spouse, may not have previously participated in the program. Only one spouse may purchase the property.
EARNEST MONEY DEPOSIT
All offers submitted by a GNND purchaser must be backed by earnest money in the form of cash or certified funds and that the Selling Broker, if used, submit with the bid, a certification that the earnest money has been deposited in the Selling Brokeršs escrow account. For ALASKA, IDAHO, OREGON, and WASHINGTON: All offers submitted by a GNND purchaser must be backed by earnest money in the form of cash or certified funds and that the Selling Broker will forward upon contract acceptance to the Closing Agent
ELIGIBLE PROPERTIES
GNND offerings will be made available pursuant to HUD program policies.
Prior to the public listing, single-unit properties in revitalization areas will be made available to qualified Firefighters, EMT's, Officers and Teachers during the Lottery Period under the Direct Sale Program. For a list of available GNND HUD-homes, click on the appropriate State button below:
Alaska Idaho Illinois
Indiana North Carolina Oregon
South Carolina Virginia Washington
West Virginia
Under the Direct Sale Program, qualified Firefighters, EMT's, Officers and Teachers may purchase single-unit properties located in revitalization areas at a 50% discount.
Only single-family homes, condos and townhouses are eligible for GNND purchases. Multifamily units are not eligible.
The option in Housing Notice 1999-30 for Firefighters, EMT's, Officers and Teachers to receive the fifty percent (50%) discount during the competitive sales listing period is no longer available. The fifty percent (50%) discount is only available during the Lottery Period.
SUBMITTING AN OFFER
When an Firefighter/EMT/Officer/Teacher has identified a property to purchase, they must submit their bid through a HUD-registered broker. Winning bids are randomly selected by computer. For a list of local approved agents, click on your state and then click on Agent Locator. The winning bid is posted each week on the website where you made your bid.
If no Preliminary Interest is received during the notification period, the property will be made available for sale to the general public on a competitive bid basis. The option in Housing Notice 1999-30 for firefighters, EMT's, officers and teachers to receive the fifty percent (50%) discount during the competitive sales listing period is no longer available. The fifty percent (50%) discount is only available during the Lottery Period.
The 50 percent discount will be applied at closing.
HUD does not pay a buyer's closing costs or real estate brokers fees on the purchase of property through the GNND program.
SALES CONTRACT and REQUIRED ADDENDA:
- Fillable Sales Contract Form 9548
Addenda:
General Addendum to Sales Contract
Radon Gas and Mold Notice and Release Agreement
For Your Protection, Get A Home Inspection
GNND Certification Form for Officer ONLY (9549-A)
GNND Certification Form for Teacher ONLY (9549-B)
GNND Certification Form for Fire Fighter/Emergency Responder ONLY (9549-C)
GNND Certification Form 9549-D (Personal information questionnaire. Must be completed by all participants)
GNND Certification Form 9549-E (Employer verification of participation employment. Must be completed by all participants)
Land Use Restriction Addendum
Lead Based Paint Addendum
Mortgage Pre-Qualification Letter from a lending institution, if the purchase is to be mortgaged, stating that an in-house credit check has been performed and the purchaser has been pre-qualified for a mortgage up to a specified mortgage amount.
Certification from a Financial Institution, if the purchase is cash, stating that funds are available on the day of closing.
To obtain an original NEW HUD Sales Contract Form 9548 Revision (1/99):
- Order the forms by calling (888) 285-6111 or Fax your request to (817) 885-8020
The Firefighter/ EMT/Officer/Teacher may pay cash or (1) obtain financing from a HUD approved lender or (2) secure conventional financing.
The down payment for GNND is $100.00 if FHA financing is used.
GNND program teacher participants must certify that they are "employed by an educational agency that serves the school district/jurisdiction in which the home they are purchasing is located."
All GNND program participants are required to own and use their property as their SOLE residence for at least three (3) years.
All GNND program participants are required to execute a second mortgage and note for the amount of the discount which HUD can call at a later date if the buyer fails to re-certify.
After three (3) years from the date of closing, the second mortgage lien will automatically be satisfied.
All GNND program participants can not currently own any residential real estate for one year prior to date of submitting an offer on the home being acquired through the program nor have previously purchased another home under the GNND program.
Failure to comply with this (or any GNND) requirement may result in the remaining balance of the Second Mortgage becoming immediately due and payable.
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Fair Housing Act
HUD has played a lead role in administering the Fair Housing Act since its adoption in 1968. The 1988 amendments, however, have greatly increased the Department's enforcement role. First, the newly protected classes have proven significant sources of new complaints. Second, HUD's expanded enforcement role took the Department beyond investigation and conciliation into the area of mandatory enforcement.
Complaints filed with HUD are investigated by the Office of Fair Housing and Equal Opportunity (FHEO). If the complaint is not successfully conciliated, FHEO determines whether reasonable cause exists to believe that a discriminatory housing practice has occurred. Where reasonable cause is found , the parties to the complaint are notified by HUD's issuance of a Determination, as well as a Charge of Discrimination, and a hearing is scheduled before a HUD administrative law judge. Either party - complainant or respondent - may cause the HUD-scheduled administrative proceeding to be terminated by electing instead to have the matter litigated in Federal court. Whenever a party has so elected, the Department of Justice takes over HUD's role as counsel seeking resolution of the charge on behalf of aggrieved persons, and the matter proceeds as a civil action. Either form of action - the ALJ proceeding or the civil action in Federal court - is subject to review in the U.S. Court of Appeals.
Significant Recent Changes
The Housing for Older Persons Act of 1995 (HOPA) makes several changes to the 55 and older exemption. Since the 1988 Amendments, the Fair Housing Act has exempted from its familial status provisions properties that satisfy the Act's 55 and older housing condition.
First, it eliminates the requirement that 55 and older housing have "significant facilities and services" designed for the elderly. Second, HOPA establishes a "good faith reliance" immunity from damages for persons who in good faith believe that the 55 and older exemption applies to a particular property, if they do not actually know that the property is not eligible for the exemption and if the property has formally stated in writing that it qualifies for the exemption.
HOPA retains the requirement that senior housing must have one person who is 55 years of age or older living in at least 80 percent of its occupied units. It also still requires that senior housing publish and follow policies and procedures that demonstrate an intent to be housing for persons 55 and older.
An exempt property will not violate the Fair Housing Act if it includes families with children, but it does not have to do so. Of course, the property must meet the Act's requirements that at least 80 percent of its occupied units have at least one occupant who is 55 or older, and that it publish and follow policies and procedures that demonstrate an intent to be 55 and older housing.
A Department of Housing and Urban Development rule published in the April 2, 1999, Federal Register implements the Housing for Older Persons Act of 1995, and explains in detail those provisions of the Fair Housing Act that pertain to senior housing.
Changes were made to enhance law enforcement, including making amendments to criminal penalties in section 901 of the Civil Rights Act of 1968 for violating the Fair Housing Act.
Changes were made to provide incentives for self-testing by lenders for discrimination under the Fair Housing Act and the Equal Credit Opportunity Act. See Title II, subtitle D of the Omnibus Consolidated Appropriations Act, 1997, P.L. 104 - 208 (9/30/96).
Basic Facts About the Fair Housing Act
What Housing Is Covered?
The Fair Housing Act covers most housing. In some circumstances, the Act exempts owner-occupied buildings with no more than four units, single-family housing sold or rented without the use of a broker, and housing operated by organizations and private clubs that limit occupancy to members.
What Is Prohibited?
In the Sale and Rental of Housing: No one may take any of the following actions based on race, color, national origin, religion, sex, familial status or handicap:
Refuse to rent or sell housing
Refuse to negotiate for housing
Make housing unavailable
Deny a dwelling
Set different terms, conditions or privileges for sale or rental of a dwelling
Provide different housing services or facilities
Falsely deny that housing is available for inspection, sale, or rental
For profit, persuade owners to sell or rent (blockbusting) or
Deny anyone access to or membership in a facility or service (such as a multiple listing service) related to the sale or rental of housing.
In Mortgage Lending: No one may take any of the following actions based on race, color, national origin, religion, sex, familial status or handicap (disability):
Refuse to make a mortgage loan
Refuse to provide information regarding loans
Impose different terms or conditions on a loan, such as different interest rates, points, or fees
Discriminate in appraising property
Refuse to purchase a loan or
Set different terms or conditions for purchasing a loan.
In Addition: It is illegal for anyone to:
Threaten, coerce, intimidate or interfere with anyone exercising a fair housing right or assisting others who exercise that right
Advertise or make any statement that indicates a limitation or preference based on race, color, national origin, religion, sex, familial status, or handicap. This prohibition against discriminatory advertising applies to single-family and owner-occupied housing that is otherwise exempt from the Fair Housing Act.
Additional Protection if You Have a Disability
If you or someone associated with you:
Have a physical or mental disability (including hearing, mobility and visual impairments, chronic alcoholism, chronic mental illness, AIDS, AIDS Related Complex and mental retardation) that substantially limits one or more major life activities
Have a record of such a disability or
Are regarded as having such a disability
your landlord may not:
Refuse to let you make reasonable modifications to your dwelling or common use areas, at your expense, if necessary for the disabled person to use the housing. (Where reasonable, the landlord may permit changes only if you agree to restore the property to its original condition when you move.)
Refuse to make reasonable accommodations in rules, policies, practices or services if necessary for the disabled person to use the housing.
Example: A building with a "no pets" policy must allow a visually impaired tenant to keep a guide dog.
Example: An apartment complex that offers tenants ample, unassigned parking must honor a request from a mobility-impaired tenant for a reserved space near her apartment if necessary to assure that she can have access to her apartment.
However, housing need not be made available to a person who is a direct threat to the health or safety of others or who currently uses illegal drugs.
Requirements for New Buildings
In buildings that are ready for first occupancy after March 13, 1991, and have an elevator and four or more units:
Public and common areas must be accessible to persons with disabilities
Doors and hallways must be wide enough for wheelchairs
All units must have:
An accessible route into and through the unit
Accessible light switches, electrical outlets, thermostats and other environmental controls
Reinforced bathroom walls to allow later installation of grab bars and
Kitchens and bathrooms that can be used by people in wheelchairs.
If a building with four or more units has no elevator and will be ready for first occupancy after March 13, 1991, these standards apply to ground floor units.
These requirements for new buildings do not replace any more stringent standards in State or local law.
Housing Opportunities for Families
Unless a building or community qualifies as housing for older persons, it may not discriminate based on familial status. That is, it may not discriminate against families in which one or more children under 18 live with:
A parent
A person who has legal custody of the child or children or
The designee of the parent or legal custodian, with the parent or custodian's written permission.
Familial status protection also applies to pregnant women and anyone securing legal custody of a child under 18.
Exemption: Housing for older persons is exempt from the prohibition against familial status discrimination if:
The HUD Secretary has determined that it is specifically designed for and occupied by elderly persons under a Federal, State or local government program or
It is occupied solely by persons who are 62 or older or
It houses at least one person who is 55 or older in at least 80 percent of the occupied units, and adheres to a policy that demonstrates an intent to house persons who are 55 or older.
A transition period permits residents on or before September 13, 1988, to continue living in the housing, regardless of their age, without interfering with the exemption.
If You Think Your Rights Have Been Violated
HUD is ready to help with any problem of housing discrimination. If you think your rights have been violated, the Housing Discrimination Complaint Form is available for you to download, complete and return, or complete online and submit, or you may write HUD a letter, or telephone the HUD Office nearest you. You have one year after an alleged violation to file a complaint with HUD, but you should file it as soon as possible.
What to Tell HUD:
Your name and address
The name and address of the person your complaint is against (the respondent)
The address or other identification to the housing involved
A short description to the alleged violation (the event that caused you to believe your rights were violated)
The date(s) to the alleged violation
Where to Write or Call:
Send the Housing Discrimination Complaint Form or a letter to the HUD Office nearest you or you may call that office directly.
If You Are Disabled:
HUD also provides:
A toll-free TTY phone for the hearing impaired: 1-800-927-9275.
Interpreters
Tapes and braille materials
Assistance in reading and completing forms
What Happens when You File a Complaint?
HUD will notify you when it receives your complaint. Normally, HUD also will:
Notify the alleged violator of your complaint and permit that person to submit an answer
Investigate your complaint and determine whether there is reasonable cause to believe the Fair Housing Act has been violated
Notify you if it cannot complete an investigation within 100 days of receiving your complaint Conciliation
HUD will try to reach an agreement with the person your complaint is against (the respondent). A conciliation agreement must protect both you and the public interest. If an agreement is signed, HUD will take no further action on your complaint. However, if HUD has reasonable cause to believe that a conciliation agreement is breached, HUD will recommend that the Attorney General file suit.
Complaint Referrals
If HUD has determined that your State or local agency has the same fair housing powers as HUD, HUD will refer your complaint to that agency for investigation and notify you of the referral. That agency must begin work on your complaint within 30 days or HUD may take it back.
What if You Need Help Quickly?
If you need immediate help to stop a serious problem that is being caused by a Fair Housing Act violation, HUD may be able to assist you as soon as you file a complaint. HUD may authorize the Attorney General to go to court to seek temporary or preliminary relief, pending the outcome of your complaint, if:
Irreparable harm is likely to occur without HUD's intervention
There is substantial evidence that a violation of the Fair Housing Act occurred
Example: A builder agrees to sell a house but, after learning the buyer is black, fails to keep the agreement. The buyer files a complaint with HUD. HUD may authorize the Attorney General to go to court to prevent a sale to any other buyer until HUD investigates the complaint.
What Happens after a Complaint Investigation?
If, after investigating your complaint, HUD finds reasonable cause to believe that discrimination occurred, it will inform you. Your case will be heard in an administrative hearing within 120 days, unless you or the respondent want the case to be heard in Federal district court. Either way, there is no cost to you.
The Administrative Hearing:
If your case goes to an administrative hearing HUD attorneys will litigate the case on your behalf. You may intervene in the case and be represented by your own attorney if you wish. An Administrative Law Judge (ALA) will consider evidence from you and the respondent. If the ALA decides that discrimination occurred, the respondent can be ordered:
To compensate you for actual damages, including humiliation, pain and suffering.
To provide injunctive or other equitable relief, for example, to make the housing available to you.
To pay the Federal Government a civil penalty to vindicate the public interest. The maximum penalties are $10,000 for a first violation and $50,000 for a third violation within seven years.
To pay reasonable attorney's fees and costs.
Federal District Court
If you or the respondent choose to have your case decided in Federal District Court, the Attorney General will file a suit and litigate it on your behalf. Like the ALA, the District Court can order relief, and award actual damages, attorney's fees and costs. In addition, the court can award punitive damages.
In Addition
You May File Suit: You may file suit, at your expense, in Federal District Court or State Court within two years of an alleged violation. If you cannot afford an attorney, the Court may appoint one for you. You may bring suit even after filing a complaint, if you have not signed a conciliation agreement and an Administrative Law Judge has not started a hearing. A court may award actual and punitive damages and attorney's fees and costs.
Other Tools to Combat Housing Discrimination:
If there is noncompliance with the order of an Administrative Law Judge, HUD may seek temporary relief, enforcement of the order or a restraining order in a United States Court of Appeals.
The Attorney General may file a suit in a Federal District Court if there is reasonable cause to believe a pattern or practice of housing discrimination is occurring.
For Further Information:
The Fair Housing Act and HUD's regulations contain more detail and technical information. If you need a copy of the law or regulations, contact the HUD Office nearest you.
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