Are Mortgagees required to pay property taxes before or at conveyance of a property to HUD?

Prior to conveyance of a Property to HUD, the Mortgagee must satisfy all taxes and special assessments, including: any Property Assessed Clean Energy (PACE) assessments:

  • that are due and payable prior to or on the date of conveyance; or
  • due and payable within 30 Days after the date of conveyance.

At conveyance the Mortgagee must:

  • certify that all available tax and assessment bills due at conveyance and within 30 Days of conveyance are paid as of the date of conveyance;
  • document such payment and identify the most recent period for which taxes were paid in Item 32, “Schedule of Tax Information,” of form HUD-27011, Part A; and
  • upload to P260, documentation, such as a paid receipt or a copy of the Mortgagee’s tax payment history screen, validating that such payment was made.

The Mortgagee must also retain invoices, paid bill receipts, or other proof of payment in the Claim Review File.
 
Policy information related to Payment of Taxes, including the following, can be found in Handbook 4000.1 III.A.2.t.iii.(B):

  • Required documentation,
  • Tax penalties,
  • Mortgagees failure to pay taxes, late fees, and interest penalties

 
For policy information see: 

 


All policy information contained in this knowledge base article is based upon the referenced HUD policy document. Any lending or insuring decisions should adhere to the specific information contained in that underlying policy document.


Topic Number: KA-03432