source:
  type: guide
  id: hud-4000-1-iv-i-selection-of-winning-bid
  authority: FHA Single Family Housing Policy Handbook 4000.1, Part IV — i. Selection
    of Winning Bid (01/02/2020)
  description: FHA Single Family Housing Policy Handbook 4000.1, Part IV — i. Selection
    of Winning Bid (01/02/2020).
  coverage_tier: operative
obligations:
- id: hud-4000-1-iv-i-selection-of-winning-bid-full
  canonical_id: hud-4000-1-iv-i-selection-of-winning-bid-full
  section: FHA Single Family Housing Policy Handbook 4000.1, Part IV — i. Selection
    of Winning Bid (01/02/2020)
  type: do
  tags:
  - regulator-direct
  - fha
  - hud-handbook
  - corpus-expansion
  - tier-operative
  primary_source:
    tier: 1
    authority: FHA Single Family Housing Policy Handbook 4000.1, Part IV — i. Selection
      of Winning Bid (01/02/2020)
    source_class: hud-handbook
    source_url: https://www.hud.gov/hud-partners/single-family-handbook-4000-1
    snapshot_id: 8c03836f77f317e1
    fetched_at: '2026-05-23T00:28:40Z'
    content_hash: sha256:411430f29b13f9b54a2ebb0e6f6e7087ecd2b90d0da22eb0c8c792eaa2d7d0df
    paragraph_quote: 'i. Selection of Winning Bid (01/02/2020) i. Notification by
      HUD of Winning Bid HUD will alert the buyer or selling broker if they are the
      winning bidder. ii. Submission of Sales Documents Once HUD has notified the
      buyer or selling broker that they are the winning bidder, the buyer or selling
      broker must send the following to the AM within two business days: • a fully
      completed form HUD-9548, signed by the buyer and selling broker; • a pre-qualification
      letter, certification of cash funds, or other proof of funds; and • all required
      addenda, if applicable, including: o a Purchase Addendum for Individual Owner-Occupant
      Buyers or an Exclusive Listing Period Purchase Addendum for Governmental Entities
      and HUD- Approved Nonprofits; o a forfeiture of earnest money deposit addendum;
      IV. CLAIMS AND DISPOSITION B. Title II Disposition 2. REO Property Disposition
      Handbook 4000.1 1651 Last Revised: 11/26/2025 o a Buyer Select Closing Agent
      Addendum; o closing instructions and certification; o form HUD-9548-B, Discount
      Sales Addendum; o all copies of form HUD-9545-Y and/or form HUD-9545-Z providing
      the original Addendum and any Supplemental Addenda; o form HUD-92564-CN, For
      Your Protection: Get a Home Inspection; o Good Neighbor Next Door addenda; o
      a flood zone property addendum; and o any disclosures required by state or local
      law. The selling broker must complete Line 3 of form HUD-9548 to identify the
      Closing Agent as the party who will be holding the earnest money deposit, unless
      otherwise instructed by the AM. iii. Earnest Money Deposit (A) Definition The
      Earnest Money Deposit is a buyer’s deposit toward the purchase of real estate
      to demonstrate that they are serious about wanting to complete the purchase.
      (B) Standard The buyer and selling broker must sign the earnest money forfeiture
      agreement. The selling broker must submit the earnest money deposit with the
      completed form HUD- 9548, for all sales other than ACA sales, to the AM within
      two business days of being notified that their buyer is the winning bidder,
      unless otherwise instructed by the AM, and the AM will forward the deposit to
      the Closing Agent. (C) Form of Earnest Money Deposit The earnest money deposit
      must be in the form of a cashier’s check, certified check, or money order with
      no termination date or cancellation provision, payable to the Closing Agent
      or to another entity as designated by HUD. Earnest Money Deposit Amounts The
      earnest money deposit amount is as follows: • for Properties with a sales price
      of $50,000 or less, the earnest money deposit is $500; • for Properties with
      a sales price greater than $50,000, the earnest money deposit is between $500
      and $2,000, as determined by HUD; • for vacant lots, the earnest money deposit
      is 50 percent of the list price; and • for Properties to be purchased under
      the GNND Sales Program, the earnest money deposit is 1 percent of the list price,
      but no less than $500 and no more than $2,000. IV. CLAIMS AND DISPOSITION B.
      Title II Disposition 2. REO Property Disposition Handbook 4000.1 1652 Last Revised:
      11/26/2025 The buyer or selling broker may contact the AM for the earnest money
      deposit amount for a specific Property. (D) Disposition of Earnest Money Deposits
      When the Transaction Fails to Close Should the sales transaction fail to close
      as scheduled, HUD may consider the earnest money deposit forfeited or may return
      all or a portion of the earnest money deposit. (1) Investor Buyer Forfeiture
      of Entire Earnest Money Deposit Subject to state law, the Investor Buyer forfeits
      100 percent of the earnest money deposit, unless HUD cancels the sales contract
      due to HUD’s inability to close the transaction for any reason. (2) Owner-Occupant
      Buyers (a) Return of Entire Earnest Money Deposit Subject to state law, HUD
      will return 100 percent of an Owner-Occupant Buyer’s earnest money deposit in
      the following circumstances: • there has been a death in the immediate family
      (contract holder, 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 buyer’s financial ability to close the sale; • there has been
      a loss of job by one of the primary wage earners, or substantial loss of income
      through no fault of the buyer; • on an insured sale, HUD determines that the
      buyer is not an acceptable Borrower; • on an uninsured sale, the buyer was pre-approved
      for FHA-insured mortgage financing in an appropriate amount by a recognized
      Mortgagee but, despite good faith efforts, was ultimately unable to secure mortgage
      financing; • within 30 Days of the contract ratification date, the buyer has
      provided to the AM written documentation from a lender supporting the buyer’s
      inability to secure financing; • HUD cancels the contract due to the documented
      presence and/or condition of lead-based paint and/or lead-based paint hazards;
      • pursuant to the terms of the VA Amendatory Clause for purchasers using VA
      financing; or • other circumstances evidencing equally good cause, as determined
      by HUD. IV. CLAIMS AND DISPOSITION B. Title II Disposition 2. REO Property Disposition
      Handbook 4000.1 1653 Last Revised: 11/26/2025 In order to receive any part of
      the earnest money deposit, the Owner-Occupant Buyer must submit documentation
      to the AM within allowed time limits evidencing the circumstances related to
      the transaction’s failure to close. (b) Forfeiture of Entire Earnest Money Deposit
      Subject to state law, the buyer forfeits 100 percent of the earnest money deposit
      in the following circumstances: • the buyer does not submit documentation supporting
      their reason for the return of any part of the earnest money deposit within
      30 Days, or such other time allowed by the AM in writing, following contract
      cancellation; or • the buyer’s submitted documentation fails to support an acceptable
      cause for the buyer’s failure to close. (3) Vacant Lots Subject to state law,
      buyers of vacant lots will be considered Investor Buyers for the purpose of
      earnest money deposit disposition. (E) Failure to Abide by HUD’s Earnest Money
      Policy Listing brokers who fail to comply with HUD’s instructions for the collection
      and forwarding of the earnest money deposit to the AM (or other party as instructed
      by the AM) may be subject to such action including: • Limited Denial of Participation
      (LDP); • notification of the state real estate commission or regulatory body;
      • referral to the appropriate office(s) for enforcement review; and/or • suspension
      or termination of the Broker’s NAID. iv. Failure to Submit Sales Documents Should
      the winning bidder fail to submit a ratified sales contract and accompanying
      documentation and deposits within allowed time limits, the AM may offer the
      Property to back-up bidders before relisting the Property. v. Electronic Signatures
      The use of electronic signatures is voluntary. HUD will permit the use of electronic
      signatures conducted in accordance with the Policy on Use of Electronic Signatures
      on the HUD REO form HUD-9548 and related addenda requiring signatures, unless
      otherwise prohibited by law. IV. CLAIMS AND DISPOSITION B. Title II Disposition
      2. REO Property Disposition Handbook 4000.1 1654 Last Revised: 11/26/2025'
  judgment: false
