Continue our series of FHA Short Sale Guidelines. PART 3 – Closing Costs for FHA Short Sales.

FHA Short Sales can be a blessing to the home owner the short sale buyer and everyone involved since there are clear guidelines to follow.  Unfortunately, not all the guidelines are followed to the “T.”  In particular, this guideline might take away what was so good in the last video.

FHA Guidelines have some quirks to them if you own a home with a FHA mortgage that you should know.  In this video we discuss the really cool incentive that is offered to home owners, but at the same time try to “temper” that excitement with some understanding of how it works.

If you have a home that is insured by an FHA mortgage then we have some good news and some other news for you.   In this video we talk briefly about qualifying for a short sale as an FHA mortgagee.  There’s a certain myth we debunk in this video.

Overall, FHA Short sales are “easier” (emphasis on quotes) than others, but there are certain things that are typically true.

Roswell, GA – Atlanta’s Premiere Short Sale Specialist Team closed another short sale last week.  Located at 620 Pine Grove in Roswell GA, this home was an FHA Short Sale through Flagstar.  There were many hurdles that are common with FHA short sales, but at the end of the day those hurdles are not comparable to other ones associated with non-fha short sales.  Here’s the common problems, or wrinkles with FHA short sales:

• If the bank does not know how to handle them (Bank of America), then your file could be processed then have to go to the back of the line to start over.
• FHA does not pay seller concessions (closing costs), except for 1% if the buyer is getting an FHA Loan
• FHA does give up to $1,000 to the home owner for “moving expenses” however, in many cases this will need to be waived in order to assist the buyer in paying for closing costs.  Some banks like, Citi, make this decision for the home owner, other banks leave it up to the home owner.
• There is an FHA Appraisal done on the property.
• Different banks use different timelines.  In theory, the home owner and realty should have at least 90 days to sell the property after receiving the pre-approval letter.  In some instances (Suntrust), the time starts when the process starts.

If you have an FHA mortgage then you might qualify for your lender to “pre-approve” your short sale with what is called a “Pre-Foreclosure Sale.”  I can’t tell you specifically how the two are really different at the end of the day.   However, I can tell you that we are closing short sales in record time thanks to the FHA process and guidelines.

What are the benefits outside of the quick closing?  The Seller can sometimes get up to $1,000 at the closing for moving expenses!

One side note is that if your Servicer/Lender is unresponsive, like Bank of America, you have to actually APPLY by calling and specifically requesting to Apply for the FHA Pre Foreclosure Sale plan.  They’ve got 60 days to review your application.