HUD REO Loan 1-4 Units

This program is for FHA-insured financing on HUD Real Estate Owned Property with a repair escrow. The properties will usually have no more than $5,000 of repairs to meet FHA’s minimum repair requirement(s). FHA guidelines will apply but are superseded by the guidelines below.


Credit score: 640 minimum
Property type: 1-4 Units, Condo, PUD
Occupancy: Must be primary residence
Down Payment: 3.5% minimum
Loan to Value: 96.5%  Max. CLTV: 96.5%
Gift Funds 100% of closing funds allowed
Closing cost: Seller and/or lender can pay up to 6%
Debt Ratio: 41%     with compensating factors up to 45/56%


Additional Notes:

  • Appraisal provided by HUD for FHA financing
  • Only for HUD Owned properties only
  • Appraiser-identified repairs must be completed
  • Up to $5,000 may be added to buyer’s loan amount
  • Repairs above $5,000 should use 203K financing
  • Repair requirements must be completed in 30 days
  • Compensation on hold until repairs are completed
  • 620 score available with 20% down
  • Repair funds must be held in escrow account
  • First time buyer not required. Must be primary residence

This page contains program highlights only. See sidebar links for further information and details.

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