How do I document the value of personal property sold for funds to close?

Borrowers may sell Personal Property to obtain cash for closing.  Personal Property refers to tangible property, other than real property, such as cars, recreational vehicles, stamps, coins or other collectibles.  The Mortgagee must obtain a satisfactory estimate of the value of the item, a copy of the bill of sale, evidence of receipt, and deposit of proceeds. A value estimate may take the form of a published value estimate issued by organizations such as automobile dealers, philatelic or numismatic associations, or a separate written appraisal by a qualified appraiser with no financial interest in the mortgage transaction.  The lesser of the estimated value or actual sales price must be used when determining the sufficiency of assets to close. 

For additional information see Handbook 4000.1 II.A.4.d.iii(N) or II.A.5.c.iii(N) available at

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-04311