The HUD-1 Settlement Statement is a government form that was used widely before 2015 when buying, selling and refinancing real estate. It lists all the charges and credits to the buyer and seller in a real estate settlement or a mortgage refinance. It is also referred to as a settlement or closing statement. A settlement agent, or closing agent, prepare a HUD-1 settlement statement. It is still used for reverse mortgages and mortgage refinancing, though in almost all other real estate closings these days The Closing Disclosure, or CD, which replaced the HUD-1 beginning Oct. 3, 2015, is used.
Key elements of a HUD-1
The HUD-1 states all the transactions that have occurred prior to the actual closing. These include:
- Loan Fees
- Assessment fees
- Escrow payments
When do I receive a HUD-1
In accordance with the Real Estate Settlement Procedures Act (RESPA), borrowers must be provided with a copy of the HUD-1 Settlement Statement at least one day before settlement. In reality, as utility charges and rental information (in an investment property) are often collated at the last minute, this form is not always tabulated until shortly before the closing.
What does a HUD-1 look like?
The statement is divided into two columns, the left listing all charges to the borrower and the right, all those to the seller.
The breakdown of the pages is as follows:
- The gross amount due from the buyer and to the seller including contract price, the total amount of the settlement charges and fees extracted from the final total on page 2 (Line 1400)
- Adjustments for items paid in advance by the seller – calculated mostly from taxes paid
- Amounts paid on behalf of the borrower, reductions in the amount due to the seller
- Adjustments for items unpaid by the seller
- Cash at settlement due from or to the buyer and seller
The second page details the associated fees and charges involved with the transaction. There are again two columns with charges paid by the buyer and seller. It features the following:
- Broker fees
- Fees related to the loan
- Items required to be paid in advance by the lender
- Deposits reserved with the lender
- Title charges
- Government recording and transfer charges
- Any additional settlement charges
Page 3 relates to the figure in the Good Faith Estimate (GFE) which has been replaced by the Loan Estimate. The GFE estimate figure would have been supplied to the settlement agent by the lender upon application of the loan. The HUD figures are listed side by side with the GFE so that a comparison can be made and discrepancies highlighted. The standard loan terms shown here will include the origination fee, interest rate, term, and payment.