The Definition of HUD-1
The U.S. Department of Housing and Urban Development (HUD) provides a collection of industry-used forms for real estate transactions. Similar to a good faith estimate, the HUD-1 is a document that provides an itemized listing of the financial details that occur during a real estate transaction. You will receive a copy of the HUD-1 form when you buy a home.
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Transactions
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The HUD-1 settlement form often is used during the closing of escrow for real property transactions. Purchasers of land and residential or commercial properties can view a HUD-1 for transaction details that apply to both the buyer and the seller. A homeowner who completes a refinance transaction for his principal residence or an investment property receives a copy of the HUD-1 settlement statement. Some title company representatives forward a copy of the HUD-1 form to the mortgage lender and the home buyer before the closing of escrow.
Details
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The financial details of a real estate settlement transaction are recorded on the HUD-1 form. Payable items such as closing costs, interest, property taxes and local recordation fees are displayed on the HUD-1 settlement form. During a purchase transaction, the HUD-1 form reflects the buyer's down payment, as well as the amount that is due to the seller, after paying off any outstanding mortgage liens, property taxes or other items.
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Settlement
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Generally, buyers and sellers meet at a title company to review and sign a copy of the HUD-1 form, during the closing of escrow. Typically, an attorney or a closing agent goes over the financial details displayed on the HUD-1 settlement form. Funds that require payment from the buyer are requested in a certified form. Proceeds the seller receives at settlement are provided in a certified form.
Distribution
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A copy of the HUD-1 settlement form is given to both the buyer and the seller. The Real Estate Settlement Procedures Act (RESPA) requires the issuance of a HUD-1 settlement form to a home buyer during the closing of escrow. The buyer's home mortgage lender will receive the originally signed HUD-1 settlement form. The title company will keep a copy of the HUD-1 form, as most title companies maintain archived records of signed closing documents.
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