HUD earnest money: the exact amount, the 48-hour rule, who holds it and how you get it back

Earnest money on a HUD home is smaller and stricter than on a normal Colorado purchase. Smaller because the amount is fixed. Stricter because the delivery window and the refund rules are written by HUD and applied by a stranger.

The amount

• Sales price $50,000 or less: $500.
• Sales price above $50,000: $1,000.
• Vacant lots: 50% of the list price.

It does not scale with price. A $600,000 HUD home in Highlands Ranch has a $1,000 deposit. That is part of why HUD contracts fall through more than normal ones, and why backups matter. Backup offers.

The 48-hour rule

When HUD accepts your bid, your agent has two business days to deliver the signed contract package and the earnest money to the asset manager. The money must be a cashier’s check or money order, payable as the acceptance notice instructs (usually to HUD or its closing agent). Personal checks, wires and app transfers are not accepted. Miss the window and HUD cancels the acceptance and moves to the next bid.

Practical advice: get the cashier’s check the day you bid. If you lose, deposit it back. If you win, it is already in hand.

Who holds it

HUD’s closing agent for the region holds the deposit, not your title company and not your agent’s brokerage. It is credited to you on the settlement statement at closing.

Getting it back

Refunds follow HUD’s forfeiture schedule: full refund for a documented financing denial or similar hardship, half for most other owner-occupant cancellations, none for an investor default. The full table. The refund is a check from the closing agent, usually 2 to 4 weeks after the cancellation is processed, mailed to the address on your contract. Make sure that address is current.

Common mistakes

1. Bringing a personal check to the asset manager. Rejected.
2. Making it payable to your own agent. Rejected.
3. Bidding on Friday afternoon and not realizing acceptance can come Monday morning with the 48-hour clock already running.
4. Assuming the deposit is refundable if you do not like the inspection. It is half refundable, at best.

A plain-English example

A buyer bid on a Denver HUD home on a Tuesday. Acceptance came Thursday at 9 a.m. Her agent delivered the signed package and a $1,000 cashier’s check to the asset manager’s office Friday at noon, inside the window. Her lender denied the loan on day 35 over an appraisal issue; she uploaded the denial letter the same day, and the closing agent mailed her $1,000 check 19 days later.

Not sure which rule applies to the house you are looking at? Call or text 303-955-4220. A live person answers, and the answer is free.

Written and reviewed by

Brian Lee Burke, Colorado HUD home specialist and team leader

Licensed Colorado real estate professional since 2002 · REALTOR® · Team leader and licensed broker of the Kenna Real Estate Group at Keller Williams DTC, a HUD-registered group that regularly bids on HUD homes · Author of The Real Estate Playbook and Mastering Real Estate. Brian’s full HUD biography.

Last reviewed: September 16, 2026 · Sources: HUD Home Store (hudhomestore.gov) and HUD program guidance, HUD Handbook 4000.1, REcolorado MLS data via kennarealestate.com, and the Kenna Real Estate Group’s own HUD transaction files.

Contact: call or text 303-955-4220 or homes@kennarealestate.com. During office hours you reach a live local Kenna real estate professional, not a robot or a national call center. Brokerage: Kenna Real Estate Group at Keller Williams Realty DTC, LLC, 6300 S Syracuse Way, Suite 150, Centennial, CO 80111. Each Keller Williams office is independently owned and operated. The Kenna Real Estate Group is an independent real estate team and is not affiliated with or endorsed by HUD or any government agency; official property information comes from HUD Home Store. Equal Housing Opportunity.

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