IF your investor is FHA-HUD-UT HOUSING and you short sale

HUD

 If your investor is FHA, VA, HUD, UT HOUSING your short sale will be different than the standard short sale. You don’t qualify for HAFA, HAMP or MHA in anyway. Your short sale is deficiency free and the treasury makes up the loss. You may be eligible for cash at closing of $750 or $1000.


That money must go toward Jr liens or in the case of UT Housing it may go toward you down payment grant. The process starts immediately rather than when you get an offer like in a traditional short sale. The bank does a full appraisal for their internal records that determine value rather than a BPO like in a traditional short sale. They then issue an ATP; approval to participate. This gives us a marketing amount and a net they require. The net is the amount that the bank gets after costs are paid to sell. This number is FIRM. After thirty days the net % drops a few % then one last time after 90 days. You only have 120 to present an offer. Once an offer is sent in the bank then processes an approval after the run the offer and signed ATP through quality control and a HUD audit. Some banks do this quickly other do not. BAC (Bank of America) is the slowest around in regard to FHA processing. M



MOST lenders follow strict HUD quidelines. These have implications for the buyer of the home as well as the seller. For the seller they MUST live in the home. If they don’t they need to have passed away, been required by law in a divorce to vacate, be hospitalized or have relocated more than 750 miles away. They cannot rent out the home and must be adhering to strict HUD policy.

For buyer their closing costs assist will not be honored unless that are getting and FHA loan. If they are they may only receive 1% of their new in paid closing costs. The investor regulations will not allow paid closing costs for non FHA buyers and FHA buyers may only get 1% of the new loan they will have after their down payment. NOT the purchase price. For example if they were to purchase a property for $200,000 and put 3.5% down their new loan would be $193,000. HUD rules will only allow $1930 in paid closing costs in this example.