HUD-1 Settlement Statement: Form, Uses, and Closing Disclosure

The HUD-1 settlement statement is a standardized federal form that itemizes every charge and credit paid by the buyer and seller in a real estate closing, or every charge in a mortgage refinance. For most mortgages applied for after October 3, 2015, it has been replaced by the Closing Disclosure, but it remains the required settlement document for reverse mortgages, home equity lines of credit, and a handful of other loan types.¹

The form was created by the U.S. Department of Housing and Urban Development under the Real Estate Settlement Procedures Act of 1974. Rulemaking authority moved to the Consumer Financial Protection Bureau in 2011, and the current instructions sit in Appendix A to 12 C.F.R. part 1024 (Regulation X).²

What’s on the Form

The HUD-1 runs three pages. The first shows the money summaries for each side of the deal. The second itemizes every fee. The third, added in 2010, compares those fees to the earlier Good Faith Estimate.

Page 1: Borrower and Seller Summaries

Section J summarizes the borrower’s side. It opens with the contract sales price on Line 101, pulls in the total settlement charges from page two on Line 103, and adjusts for prepaid taxes, assessments, or insurance. The 200 series lists credits to the borrower: earnest money on Line 201, the new loan amount on Line 202, and any seller-paid costs. Line 303 is the bottom line — the cash the borrower brings to closing, or receives back.³

Section K mirrors that structure for the seller in the 400, 500, and 600 series, accounting for the sales price, the seller’s share of settlement charges, existing liens being paid off, and prorated obligations. Line 603 shows the seller’s net proceeds.⁴

Page 2: The Settlement Charges

Section L itemizes every cost imposed on either party. Charges are grouped by number series:

700 series: real estate broker commissions.
800 series: loan-related charges, including the origination fee on Line 801, discount points on Line 802, and required services like the appraisal, credit report, and flood certification.
900 series: items the lender requires to be prepaid at closing, such as daily interest, mortgage insurance premiums, and homeowner’s insurance.
1000 series: escrow deposits for property taxes, hazard insurance, and other recurring obligations.
1100 series: title charges, including the title search and insurance, settlement or closing fees, and attorney fees.
1200 series: government recording fees and state or local transfer taxes.
1300 series: additional charges such as pest inspections, surveys, and home warranties.

Line 1400 totals every settlement charge, and that number carries back to the summaries on page one.⁴

Page 3: GFE Comparison and Loan Terms

The third page places the Good Faith Estimate figures next to the actual HUD-1 charges. The chart splits fees into three tolerance categories: charges that cannot increase at all, charges that collectively cannot increase by more than 10 percent, and charges that may change freely. Below it, a loan terms summary lays out the key mortgage details supplied by the lender.³

If a charge exceeded its tolerance, the loan originator had 30 calendar days from the settlement date to reimburse the borrower and issue a corrected HUD-1. Inadvertent or technical errors on the form were not treated as RESPA violations so long as a corrected statement was provided within that same 30-day window.⁵

Who Prepares It and When You See It

The settlement agent prepares the HUD-1. The lender must supply the loan term information in a format that lets the agent complete the form without having to dig through the underlying loan documents.³

Federal law gives you a one-day advance inspection right. The settlement agent must let you review the HUD-1, completed with every item known at the time, during the business day immediately before closing. A completed copy then goes to the borrower, seller, and lender at or before settlement. You can waive the advance inspection in writing, in which case the document must be mailed or delivered as soon as practicable afterward. The same mail-as-soon-as-practicable rule applies if you don’t attend the closing or the settlement agent doesn’t conduct a meeting.⁶

Lenders must keep the completed HUD-1 for five years after settlement.⁶

The HUD-1A: Refinances and No-Seller Deals

For refinances, subordinate-lien loans, and any other transaction without a seller, settlement agents may use the HUD-1A, a shorter version of the form. The HUD-1A cannot be substituted in any deal that involves a seller.⁴

The HUD-1A drops the 700 series broker commission lines and adds two sections not found on the standard form. Section M, “Disbursement to Others,” lists payees other than the borrower who receive loan proceeds directly out of settlement funds, such as the holder of an existing mortgage being paid off. Section N, “Net Settlement,” calculates the net amount to be disbursed to the borrower after subtracting settlement charges from the principal loan amount. A settlement agent can also just use the standard HUD-1 and fill in only the borrower’s side, ignoring seller-related lines.³

When the HUD-1 Still Applies

Most residential purchases and refinances no longer use the HUD-1. The TILA-RESPA Integrated Disclosure rule, effective October 3, 2015, replaced it with the Closing Disclosure for most closed-end residential mortgages.⁷ The HUD-1 still governs several categories of loans that TRID left alone:

Reverse mortgages, including Home Equity Conversion Mortgages, continue to use the Good Faith Estimate and HUD-1 rather than the Loan Estimate and Closing Disclosure. As of 2025, no pending rulemaking would change this.⁸
Home equity lines of credit are covered by Truth in Lending Act disclosures rather than TRID.¹
Chattel-dwelling loans, meaning manufactured or mobile home loans not secured by real estate, still use the HUD-1.¹
Small-volume creditors who originate five or fewer mortgages per year are also outside TRID.²

The HUD-1 also remains technically applicable to any mortgage application submitted on or before October 3, 2015, though as a practical matter those loans have long since closed.¹

How the HUD-1 Differs From the Closing Disclosure

If you closed on a standard purchase or refinance after October 2015, you received a Closing Disclosure, not a HUD-1. Under TRID, the old Good Faith Estimate and initial Truth in Lending disclosure became the Loan Estimate, given shortly after application. The HUD-1 and the final Truth in Lending disclosure became the five-page Closing Disclosure, which must reach the borrower at least three business days before closing.⁹

Two changes matter most in practice. First, the review window grew from one business day under the HUD-1 rules to three business days under the Closing Disclosure, and a fresh three-day clock restarts if the annual percentage rate becomes inaccurate, the loan product changes, or a prepayment penalty is added.¹⁰ Second, the Closing Disclosure uses consistent terminology and line positions from the Loan Estimate through closing, so a fee shown at application appears in the same place at closing.

Tax-Relevant Lines to Watch

Several HUD-1 line items matter at tax time. For a personal residence, the most commonly deductible items include:

Points on Lines 801 and 802. Loan origination fees and discount points may be fully deductible in the year paid if the mortgage is for a primary home, the points represent a percentage of the principal, and they are paid from the borrower’s own funds rather than loan proceeds.¹¹
Prepaid mortgage interest on Line 901. Deductible as an itemized deduction, and typically reported on Form 1098.¹²
Real estate taxes on Lines 106, 107, and 1004 through 1006. Deductible when actually paid to the taxing authority. Amounts placed in escrow are not deductible until the taxing authority receives them.¹¹
Mortgage insurance premiums. Deductible as qualified residence interest for contracts issued after December 31, 2020, and before January 1, 2026. Prepaid premiums must be amortized over the shorter of the loan term or 84 months.¹¹

Many other line items are not deductible but add to the property’s cost basis, which matters when the home is eventually sold. These include the purchase price, broker commissions, title insurance, and recording fees. For rental property the treatment differs: points are typically amortized over the mortgage term rather than deducted immediately, and items like homeowner’s insurance become deductible rental expenses.¹²

Because lenders must keep the completed HUD-1 for five years and the form ties directly to basis, hold onto your copy well past closing. If you’re preparing a return years later and cannot locate it, the settlement agent or lender should still have it on file.

1
Consumer Financial Protection Bureau. What Is a HUD-1 Settlement Statement
2
National Credit Union Administration. Real Estate Settlement Procedures Act – Regulation X
3
Cornell Law Institute. Appendix A to Part 1024
4
Consumer Financial Protection Bureau. Appendix A to Part 1024 – Instructions for Completing HUD-1 and HUD-1A
5
Federal Reserve Bank of Philadelphia. RESPA
6
Consumer Financial Protection Bureau. § 1024.10 – One-Day Advance Inspection and Delivery
7
National Association of Realtors. TRID (TILA-RESPA Integrated Disclosure)
8
Mutual of Omaha Reverse Mortgage. What Settlement Agents Need to Know About HECMs
9
FHA.com. TILA-RESPA Integrated Disclosure Rule
10
Consumer Financial Protection Bureau. TILA-RESPA Integrated Disclosure FAQs
11
H&R Block. HUD-1 Tax Deductions
12
TaxSlayer Pro. Real Estate Transactions – What Is Deductible