If you’ve been doing a little research on closing/settling on a home, you’ve probably come across this acronym. In a sentence, the HUD-1 form is a document that itemizes every financial transaction that is happening between all parties involved in the transfer of property. That’s the short of it. Learn more in our blog!
HUD-1 Settlement Statement
What Does HUD Stand For?
HUD refers to the Department of Housing and Urban Development, which is the arm of the federal government that makes legislation relating to home ownership and property development.
Usually, the document is just called the HUD, settlement statement, or closing statement. You might also hear the term GFE used in conjunction with the HUD. GFE stands for Good Faith Estimate, and this is what the lender provided you with early in the process as an estimate of the costs you would incur. The GFE was added to the HUD form in 2010.
RESPA is one more acronym you might hear associated with the HUD. This stands for Real Estate Settlement Procedures Act. This encompasses laws that ensure charges and fees the consumer must pay are disclosed to them. The HUD is one measure that ensures consumers know what they’re paying and what it’s for.
What’s on the HUD?
There is a lot of data on the closing statement. Information re the buyer seller, lender, property details, and settlement agent is listed. The majority of the document is a lot of figures. It’s not practical to list them all here, but here are a few examples.
- Gross amount due from the buyer to the seller.
- Cash due at settlement.
- Adjustments for items paid for in advance or as yet unpaid.
- Broker fees.
- Loan related fees.
- Title fees.
- Charges for government recording and transfer.
- Details of loan terms (amount, interest rate, other details).
- Items the lender must pay in advance.
When Does the HUD Come into Play?
The HUD is prepared by the settlement or closing agent at closing time. You have the right to inspect this form one day prior to settlement. Compare the HUD to the GFE to make sure you weren’t overcharged for a loan, title, escrow fees, or document recording.
After closing, hold on to your HUD-1. You’ll need it to file your taxes in the year you purchase the home, as well as the year you sell the home.
Real Estate Closing Services from Colony Title Associates
Colony Title has been in business since 1995 and handles over 2,000 real estate closings per year. If you have any questions or would like to speak to a representative about closing, please give us a call at 410-884-1160 or visit our website for more information.