FHA loans (seller side) are tough to negotiate when dealing with a short sale, but they CAN be successful. Unfortunately, those tough negotiations are about to hit new, even tighter regulations launching Oct 1st.
Effective October 1, 2013 U.S. Department of Housing and Urban Development (HUD) has announced the following changes to their Federal Housing Administration (FHA) Short Sale requirements:
- New or different documentation requirements for verifying assets, income, and expenses
- Deficit Income Test (DIT) will be used to determine a homeowner’s financial hardship
- Possible elimination of the financial hardship/deficit income pre-foreclosure sale requirement for:
- service members who have received Permanent Change of Station (PCS) Orders, or
- homeowners who are deemed eligible for a streamlined pre-foreclosure sale option
- New validation requirements for appraisals
- Different dual agency/brokerage requirement: to meet the new short sale purchase contract addendum requirements, brokers and their agents may represent either the buyer or the seller, but not both parties
Basically, the test on hardship will be tighter, appraisals will need to be validated in a more detailed way and one the real estate agent side of things…dual agency is no longer allowed. Call me for more info if you’ve been considering a short sale. My direct cell # is 703-400-6757 and my email address is jennifer@jyhteam.com.
