Can I finance a HUD home to an owner occupant?

[Sandy Uhlmann]

I was wondering if anyone had any experience in financing a HUD home to an owner occupant? I offered to finance a HUD home to a friend/handyman who never thought he could afford a home/be a homeowner. We found a home on the hud homestore and we checked with the realtor to make sure that it was OK to provide financing. My friend bid and hewon the bid. He was so excited he was crying! My realtor called today and now thinks there may be an issue with me financing to him since I/my SDIRA who is lending him the money is not a "conventional lender."

Does anyone have any experience with financing to people who buy HUD homes? I don't want my friend to lose his earnest money because HUD won't let me finance to him.

Any advice would be appreciated.

[Greg H.]

@Sandy Uhlmann

The answer is yes you can do it.  The problem is not with the title company but with the Contract Reviewer for Hud's Asset Manager which in Missouri appears to be Chronos.  My guess would be the reviewer initials are JH and she is tough.  Here is what I would do :

You need to provide a lender letter containing the exact language that HUD requires. You also need to provide proof of funds that the funds to lend are available. I would also attach a letter of explanation detailing that you are indded providing the financing and such. The only potential issue is that the funds are still in you SDIRA and often they are not considered "ready" funds as they can take a few days to access.

Your agent must do a great job of explaining and providing the information in a timely manner.  Wanting a gift letter did not get him/her off to a good start.  Feel free to PM me if you need an example of an acceptable lender letter