It may be hard to believe, but a simple, 2-letter typo could have cost HUD $25,000. As a Columbus real estate agent who lists HUD homes, it is my duty to look out for my customers (in this case HUD).  I notified the asset manager an the error was corrected. And possibly, I saved them a bunch of money.

Let me explain what happened.

A week ago I discovered that one of my HUD listings was rated as UnInsured (UI). I did not see any obvious reason for this classification. As a matter of fact, the house appeared to be in excellent condition.

If Columbus houses are rated as UI, it usually means that they need major repairs. Most buyers will shy away from these homes. They are typically left for investors, who will buy them with cash or a rehab loan.

The UI rating also limits your choice of financing. FHA won’t write a regular loan. You would have to get a 203k rehab loan, which takes much longer and can be a serious hassle, as you need to supply repair quotes and submit your home to inspections once the work is done to get reimbursement.

After I contacted the asset manager, the mystery was solved. There was a typo. Instead of IN (insured) someone mistakenly typed UI (uninsured).

A simple typo with huge ramifications. HUD could have lost $25K on this specific home for sale, if the error would not have been detected.


Because this house would sit on the market for a month with only low ball offers. HUD would have to reduce the price to move the property and accept a cash offer from an investor. They are usually just 75% of the asking price (or less).

Since the error was corrected, the number of showing requests for this HUD home have skyrocketed. At least 10 buyers looked at it in the past couple of days.

Details of the Featured Home

You can see a picture of the house I was talking about at the top of this post. It is located in a newer subdivision in Delaware, Ohio. It is in move-in condition and an excellent deal for owner occupants at the current list price!

1767 Ashburn Dr, Delaware, OH
Asking Price: $105,000
Comparable Sales: $130,000
Year Built: 2002
Sq Footage: 1,652
Bedrooms: 3
Bathrooms 2/1
Category: Insured
Schools: Delaware
Deadline: 7/15/2011
Eligible: owner occupants