A HUD‑1 Settlement Statement is a standardized U.S. real‑estate settlement form that itemizes all charges and credits to both buyer (called the “borrower” on the form) and seller in a consumer mortgage transaction. It lists loan fees, settlement charges, escrow and prepaid items, seller credits, mortgage payoffs, and the cash required to close. The HUD‑1 (and the shorter HUD‑1A for transactions without a seller) was the standard settlement statement used for many years and is still required for certain transactions today, most notably reverse mortgages and many refinances. (CFPB)
Key changes and current rules
– October 3, 2015: The Consumer Financial Protection Bureau implemented the TILA‑RESPA Integrated Disclosure (TRID) rule. For most purchase mortgages, the Closing Disclosure replaced the HUD‑1 as the final settlement document. If you applied for a mortgage on or before Oct. 3, 2015, you may still receive a HUD‑1. (CFPB)
– HUD‑1 / HUD‑1A are still used for reverse mortgages and many mortgage refinance transactions. Closing Disclosures are used for most other consumer mortgage transactions. (CFPB)
– Timing: Federal rules require a copy of the HUD‑1 be provided at least one business day prior to settlement. The Closing Disclosure must be received by the borrower at least three business days before closing. These advance timing rules give borrowers time to review charges and ask questions. (CFPB)
Understanding a HUD‑1 form — how it’s organized
– Verso (back) first: The back of the HUD‑1 contains two main columns—left for the borrower’s charges and right for the seller’s charges—itemizing each party’s line‑by‑line charges.
– Recto (front): Totals from the back are carried to the front. The front page shows the final cash required from the buyer and the net to the seller at the bottom.
– Typical borrower items: loan origination fee, discount points, appraisal fee, credit report fee, flood certification fee, prepaid interest, homeowners insurance, property taxes and escrow, owner’s and lender’s title insurance, settlement/closing agent fees.
– Typical seller items: real estate commissions, payoff of seller mortgage(s), contract credits to buyer, prorations (taxes/HOA dues), and settlement agent fees allocated to seller. (CFPB)
Special considerations and common red flags to check
– Compare papers: If you received a Loan Estimate (for purchase/refinance) or the Closing Disclosure, compare every cost on those documents to the HUD‑1 (or Closing Disclosure). Unexpected increases in fees are a red flag.
– Seller credits and payoff accuracy: Verify seller credits and mortgage payoff amounts. An incorrect payoff can lead to a short payoff and legal exposure.
– Double charges: Look for duplicate fees (e.g., the same service charged twice or a service listed that was never performed).
– Prepaids and escrows: Confirm prorations for taxes, HOA dues, and prepaid interest are accurate through the closing date.
– Title insurance: Confirm who pays owner’s vs. lender’s title insurance and that the amounts and policy names match expectations.
– Total cash to close: Reconcile the “cash required from borrower” with your own calculations, deposit receipts, and any seller credits.
– Timing/changes: With HUD‑1, figures could be updated through the day of closing; Closing Disclosures are subject to stricter change rules and the three‑day review period — last‑minute changes can delay or require re‑disclosure. (CFPB)
Practical steps — before closing (borrower)
1. Request documents early: Ask for the HUD‑1 or Closing Disclosure as soon as it is available and verify you’ll receive it at least one day (HUD‑1) or three business days (Closing Disclosure) prior to closing.
2. Gather comparisons: Have your Loan Estimate, purchase contract, and any prior quotes handy.
3. Follow a line‑by‑line checklist:
• Confirm loan terms (amount, interest rate, monthly payment).
• Match fees to services you actually agreed to (origination, appraisal, credit report).
• Verify seller credits and prorations (property taxes, HOA).
• Check title insurance amounts and parties listed.
• Reconcile totals and “cash to close.”
4. Ask questions in writing: If anything is unclear, ask the lender or settlement agent for written clarification or corrected figures.
5. Delay signing if necessary: Don’t feel compelled to sign if errors are unresolved—correcting mistakes before funding is safer than fixing them afterward.
6. Get receipts: Keep copies of the signed HUD‑1/Closing Disclosure and any corrected versions.
Practical steps — before closing (seller)
1. Review seller column: Confirm commissions, payoff amounts, prorations and any credits are correct.
2. Verify payoff instructions: Ensure the seller’s mortgage payoff information and amounts are accurate and include any required reconveyance or release instructions.
3. Ask for documentation: Request a clear itemization of any seller costs you don’t recognize.
4. Retain copies: Keep signed copies and proof of receipt of funds.
If you find an error or suspect a problem
– Contact the settlement agent and lender immediately and request a corrected HUD‑1 or Closing Disclosure in writing.
– Keep a written record of communications (email, certified mail).
– If the issue is not resolved, you can file a complaint with the Consumer Financial Protection Bureau (CFPB) and/or HUD. For suspected discrimination, file with CFPB or the U.S. Department of Housing and Urban Development. Consult a real estate attorney if necessary. (CFPB; HUD)
Are HUD‑1 forms still used?
Yes — but limited. HUD‑1 or HUD‑1A forms remain the required form for reverse mortgages and many mortgage refinance transactions. For most purchase transactions and many other consumer mortgages, the Closing Disclosure replaced the HUD‑1 as of Oct. 3, 2015. (CFPB)
What is a reverse mortgage?
A reverse mortgage is a loan for homeowners aged 62 and older that lets the homeowner convert home equity into cash — either as a lump sum, monthly payments, or a line of credit. The loan balance becomes due when the homeowner dies, sells the home, or moves out and the home is no longer the primary residence. HUD‑insured Home Equity Conversion Mortgages (HECMs) are the most common reverse mortgages. Reverse mortgages still use the HUD‑1 settlement form. (FTC)
When do I get a Closing Disclosure?
By law, borrowers must receive the Closing Disclosure at least three business days before closing for most mortgage loans (purchases and many refinances) so they have time to review final terms and costs. Closing Disclosures are not used for reverse mortgages or loans originated before Oct. 3, 2015; those will use HUD‑1/HUD‑1A or older disclosures. (CFPB)
Warning — discrimination and illegal practices
Mortgage lending discrimination based on race, religion, national origin, sex, marital status, use of public assistance, disability, or age is illegal. If you suspect discrimination or predatory practices, you can report the lender to the CFPB or HUD, and consider consulting an attorney or housing counselor. (CFPB)
Practical closing checklist (quick reference)
– Receive HUD‑1 or Closing Disclosure on time (1 business day for HUD‑1; 3 business days for Closing Disclosure).
– Compare with Loan Estimate and purchase contract.
– Verify loan terms and math on every line.
– Confirm seller credits, prorations, and payoffs.
– Ask for written explanations of any unfamiliar fees.
– Do not sign until discrepancies are resolved.
– Keep copies of everything.
Sources and further reading
– Consumer Financial Protection Bureau (CFPB), “What Is a HUD‑1 Settlement Statement?”
– CFPB, Regulation X: 1024.10 One‑Day Advance Inspection of HUD‑1 or HUD‑1A Settlement Statement; Delivery; Recordkeeping
– CFPB, “When Do I Get a Closing Disclosure?”
– Federal Trade Commission (FTC), “Reverse Mortgage”
– Provide a downloadable HUD‑1/HUD‑1A checklist you can print and bring to closing.
– Walk through a sample HUD‑1 line by line with example numbers to illustrate how totals are calculated.