Replies to This Discussion

Permalink Reply by Vanessa Calhoun on May 25, 2011 at 8:04am

I didn't mention VA because most of our local buyers are FHA and conv. As long as the minimum net to HUD is met, ask your negotiator to request the variance.



Brian Bean said:

Vanessa, only FHA and Conv?

Just received a VA offer asking for $3,000 non-allowables to be paid by seller, whose loan is FHA. VA fall within those parameters?

Thanks
Vanessa Calhoun said:

You can request a variance for up to 3% in closing costs with either a conventional or FHA. Just make sure that the net to seller falls within their required parameters. I have done it on all of my FHA short sales.

alisa hagner said:

If the seller has FHA financing, only a 1% seller concession will be allowed for a new FHA loan.

 

Alisa

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Permalink Reply by Teresa Simon on May 25, 2011 at 9:33am

Ask your negotiator for a variance when you submit the offer.  Read up on variances.  HUD short sale department told me about variances. 

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Permalink Reply by Valerie Pressley on May 29, 2011 at 1:51am

The letter is referring to your seller's loan, not the buyer's loan.  The buyer can get any kind of financing they want.  The bank is just not going to pay any of the buyer's closing costs.

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Permalink Reply by Mike Ashcraft on May 29, 2011 at 5:10am

Ditto on everything Vanessa said.  Early on in my Short Sale career I had an uncommonly helpful Negotiator tell me it is pretty easy to get FHA to approve a variance for closing costs as long as the Minimum Net is being met.  I have done many FHA S-Sales since and every one of them the buyer was requesting 3% for closing costs (some were FHA, some were conventional), and have always been able to get the variance approved.  Also, like Vanessa said there are some Negotiators that don't know what they are doing and you may have to fight w/ them over the fact that the FHA WILL approve the closing costs.  One thing to note is that requesting a variance (depending on how back-logged the FHA is at the time) can take an extra 2-4 weeks.  Its good to give the buyers a heads up on that, but most don't care about the extra time if it means getting their closing costs approved.  Good luck.

Vanessa Calhoun said:

If you have a buyer whose utilizing ANY type of financing whose requesting 3% in closing costs, have your negotiator to submit a variance request directly to HUD. They are normally approved with normal and customary closing costs AS LONG AS the required net to HUD has been met. I do this on all of my FHA shorts, which easily make up about half of my short sale business. Additionally, if you have a negotiator who refuses to submit the request, contact the FHA Servicing hotline directly. They'll jump right on it.

 

Good luck!

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Permalink Reply by Mike Ashcraft on May 29, 2011 at 5:19am

I am a bit surprised by how many SS agents still believe the FHA will absolutely not approve closing costs above the 1%...

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