HUD Policy Helps Quicker Foreclosure Sales

Ann McKinley NMLS#200305, Network Funding

HUD has temporarily waived the rule on FHA loans that prohibits insuring mortgages on homes which the seller has owned less than 90 days.  Previously this requirement has both prevented the quick turn around of foreclosed property and limited buyer’s loan options when seeking affordable homes.  The current plan is for the waiver to be in effect for one year, however FHA may withdraw or extend at any time.  It does come with the following restrictions:

*Transactions must be arms-length.  No identity of interest between the buyer and seller.
*If the sales price is 20% or more above the seller’s acquistion cost, the lender must meet specific conditions for the waiver to apply.
*Waiver is limited to forward mortgages and cannot be used under the Home Equity Conversion Mortgage purchase program.

Read More: full text of waiver on HUD.gov

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