Welcome to “What Is A HUD-1?”, a four-part series breaking down the settlement statement that’s used in a real estate transaction. The settlement statement, also known as the HUD-1, is your receipt – it’s an itemization of every penny associated with the sale or purchase, so if it’s money-related then it’ll be shown on the HUD-1. Each party (buyer and seller) or signatory will sign multiple copies of the HUD-1.

A quick note – HUD, which is short for the US Department of Housing and Urban Development, is a department in the federal government that oversees, among other things, housing, and includes departments like Freddie Mac, Fannie Mae, and the Federal Housing Administration.

The HUD-1 is split into a buyer side (left column on pages 1 and 2) and a seller side (right column on pages 1 and 2). We’ll start Part One with the borrower’s side of the transaction – the Gross Amount Due From Borrower (these are costs to the buyer).

• Line 101, Contract Sales Price – this one’s easy. This is the total purchase price for the property(ies). 
• Line 103, Settlement Charges to Borrower – these are the total settlement charges to the buyer, and are brought over from line 1400 on page 2.
• Lines 106-112, Adjustments for Items Paid by Seller in Advance – here you’ll reimburse the seller for things that they’ve already paid, from the date of settlement through the end of the fiscal period. These items might include HOA fees, taxes, or any other special assessments the seller has already paid for.

Amounts Paid By or on Behalf of the Borrower (these are credits to the buyer):

• Line 201, Deposit or Earnest Money – at the time the offer was written and submitted, the buyer submitted a “good faith deposit”. That good faith deposit, or GFD, is shown here.
  
• Line 202, Principle Amount of New Loan(s) – if there’s a loan, or loans, associated with the purchase, the dollar amount of each of those loans will be here.
• Line 203, Existing Loan(s) Taken Subject to – we don’t see much of this anymore, but if a buyer is also taking on the outstanding balance of the seller’s loan, this will reflect the balance of that loan.
• Line 207, Closing Cost Credit – if the seller is paying closing costs on behalf of the buyer, those will be itemized here.
• Lines 210-219, Adjustments for Items Unpaid by the Seller – similar to lines 106-112, but these are items that the seller is reimbursing you for items that are left unpaid (again, like taxes and HOA fees).

Plenty more to come – look for the next installment, where we’ll take a look at the summary of the seller’s side of the transaction.