Among with the many programs and mortgage assistance options that HUD offers for FHA Loans a common form of assistance offered is FHA Short Sale Assistance.
FHA stands for the US Federal Housing Administration which is a part of HUD, HUD stands for Department of Housing and Urban Development. HUD provides mortgage insurance for FHA-approved lenders.FHA loans are normally given to first-time home buyers that cannot afford the conventional 20% down payment. Typically with FHA you can obtain a loan with as little as 3% down.
What is a FHA Short Sale Assistance ?
Through FHA Short Sale Assistance HUD allows a borrower to sell the subject property for less than what is owed and agrees to forgive any deficiency balance. Obtaining FHA Short Sale Help requires the approval from HUD , HUD will allow a borrower to sell their home for less than what is owed and agrees to accept a certain percentage of the homes appraised value, FHA has very specific set guidelines as to what “net” they will allow the mortgage servicer to approve which can make FHA Short Sale Assistance tough to obtain.
5 Things to Avoid when Applying for FHA Short Sale Assistance
- Vacating the property for more than 12 months for any reason other than employment Relocation :The property cannot be vacant for more than 12 months, If the home is vacant for more than 12 months you aren’t eligible unless you have been relocated for employment. It is possible to request that FHA make an exception to this rule by reviewing a variance. variances are approved on a case-by-case basis.
- Reporting the Subject property as a Rental property or Second home : Rental properties are not eligible but variances may be made for rental properties if you can show that the property was not purchased as a rental, that it was not used as a rental for more than 18 months, and that the reason for vacating was related to the cause of default (for example, job loss or transfer, divorce or death).
- Missing More than 40 Payments : If the Loan is more than 40 payments delinquent the borrower is only eligible for home retention options ( Loan Modification or other forbearance options )
- Accepting an Offer too soon : FHA requires a home to be on the market for 15 days before an offer can be accepted
- Not Missing a Payment : The homeowner must be in default, or soon be in default, as a result of an adverse and unavoidable situation.
How Can I Obtain FHA Short Sale Help ?
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FHA Short Sale Assistance : 5 Things to Avoid when Applying for FHA Short Sale Assistance by email@example.com