How to Avoid a HUD Contract Rejection


A fairly significant percentage of the HUD 9548 purchase contracts submitted after a bid is accepted are rejected and the selling agent must make corrections in a short two business day window. Any agent wants to avoid a HUD contract rejection. The problem is that the process is different and catching every detail is challenging. Until now!

One of the HUD asset managers, recently provided us with a list of the most common reasons for rejection of these contracts.

Top Ten Reasons Agents Receive a HUD Contract Rejection

  1. Buyer does not initial line 12 where Purchaser acknowledges the Seller can keep their earnest money deposit if the terms of the contract are not met.
  2. Buyer name on the contract does not match the name on the bid.
  3. Financing type on the contract should be based on the way the property was bid at
  4. Lead Based Paint Addendum contains check marks instead of the Broker’s initials where required.
  5. Often the Lender Letter does not indicate all the required items: loan type, loan amount, sales price, credit verified and a signature for the loan officer or name, title and contact information of loan officer.
  6. Money orders or other certified funds for earnest money must be made payable to HUD.
  7. Dollar amounts on line 5, 6a, 6b, & 7 do not match the bid amounts originally submitted at
  8. The Buyer and/or the Broker signs in HUD’s space.
  9. Authorization letter not included for agent to sign on behalf of the Broker. Check with the Listing agent as to what is required as this varies by Asset Manager.
  10. Not following all the instructions on the correction email. Errors on the revised contract submission are subject to the contract being rejected and the property placed back for bid at

We are here to help you get your contract submitted correctly. If you are interested in understanding this process better, I strongly suggest you consider signing up for one of our HUD selling agent classes.

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