What is a HUD-1 statement in the USA?

4th June, 2014
  • You may have heard the HUD-1 form mentioned in relation to buying a property in the USA and wondered whether you need one. In reality only a relatively small number of non-US investors obtain a mortgage from an American bank to buy their the USA property so you are unlikely to find yourself needing an HUD-1. 

    Nevertheless, it's important to understand the financing options open to you as a prospective participant in the US real estate market and an understanding of the HUD-1 statement is certainly worth having.

    A HUD-1 is another name for a settlement statement relating to a mortgage. This is a form prescribed by the US Department of Housing and Urban Development, which is where the acronym HUD comes from. This form itemises the charges which are imposed on both the borrower and the seller in regard to the settlement of the real estate transaction.

    On the day before settlement, the closing day, you have the right to inspect the HUD-1 settlement statement which has been drawn up for your transaction. The form will have been filled out by the settlement agent who is conducting the closure. Ideally, the HUD-1 will be mailed or delivered to you before the settlement, or in the case of a foreign buyer, emailed. If there is no settlement meeting scheduled the HUD-1 is sent out by the escrow agent following the closing of the sale.

    To reiterate, you only need to worry about the HUD-1 form if you have taken out a mortgage with a US bank to finance the purchase of your the USA property. If you are a cash buyer or have raised your financing by other means, such as the re-mortgage of your current home, the HUD-1 will not come into play and there will be one less piece of paperwork to worry about.

    Alternatively, if you have arranged your mortgage locally, your US mortgage agent will be able to oversee the HUD-1 signing process.


    by: Prime Asset Investments

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