FHA - HUD Short Sales


FHA - HUD Short Sales

HUD rules for FHA short sales, tips, experiences, etc.

Fax LOA:  918-236-3274

PH 877 622-8525

Members: 583
Latest Activity: Sep 28

FHA Preforeclosure Sale Guidelines


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7-9-13 Updated Pre-Foreclosure Sale (PFS) and Deed in Lieu (DIL) of Foreclosure - Effective 10-1-13.

FHA National Servicing Center 

(877) 622-8525 Customer Service

1-800-489-1733 Fax

1-866-808-5050 Fax for LOA


301 NW 6th Street, Suite 200
Oklahoma City, OK 73102
National Servicing Center:


Please note that effective October 1, 2014, Deval LLC will no longer be HUD's National Servicing  loan servicing contractor. The new contractor, Novad Management Consulting will be your new point of contact.


For all Customer Service questions please contact [email protected]

FHA Contract Clause

"Sale is contingent upon the seller receiving prior written approval of Insert Name of Lender/Servicer."

FHA Listing Agreement Clause

“Seller may cancel this agreement prior to the ending date
of the listing period without advance notice to the broker, and
without payment of a commission or any other consideration if
the property is conveyed to the mortgage insurer or the mortgage
holder.” The sale completion is subject to approval (under HUD
guidelines) by the mortgagee.


Discussion Forum

NOVAD as 2nd lien

Started by Noelle Battle. Last reply by Brett Goldsmith Nov 22, 2019. 5 Replies

Hud/FHA declining to do short sale

Started by Savita Savita. Last reply by Brett Goldsmith Sep 26, 2018. 1 Reply

Comment Wall


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Comment by Brett Goldsmith on September 12, 2018 at 4:48pm

@Gregg depends if NET is being exceeded or not. It's possible to go straight to 86 or 84% tier within 30 days but you need a variance submitted.

Comment by Guerry Clegg on September 12, 2018 at 11:41am

That's good to know. The last time I tried they were completely rigid, but that has been a while. Our net was about 94 pct, which made it more frustrating. 

Comment by Alexis Adams on September 12, 2018 at 11:38am

It's hard to say as a general rule as I am sure it's case-by-case but I have seen HUD go below required net and allow concessions within the first 30 days. For example, a few weeks back I had a case with an FHA buyer where we were just shy of 86% immediately after the appraisal with 3% seller concession and HUD approved the variance. If you're going to go below 88%, I would just say never go below 84% bottom line and it doesn't hurt to have the servicer submit the variance to HUD and see what they say. HUD seems to be responding quicker as well so there isn't a huge wait time that I am seeing anymore. 

Comment by Guerry Clegg on September 12, 2018 at 11:32am

So Brett and Alexis, it sounds like HUD has loosen their rule about the allowable/disallowable costs. Is that right? If so that's good to know. It still has to net 88 percent for the first 30 days, so that doesn't allow much wiggle room any way.

Comment by Al on September 12, 2018 at 10:45am

Reason why I ask is on my previous offer for the same property the bank only allowed 1% but it was a conventional offer. Now I have a fha offer and seller is asking 3% but its a fha offer. 

Comment by Brett Goldsmith on September 12, 2018 at 9:50am

3% is typically approved for FHA buyers if the minimum NET for investor is being exceeded. If you are asking for closing costs and obtaining conventional financing you likely will not be approved for any credits towards closing costs.

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Comment by Alexis Adams on September 12, 2018 at 9:19am

Al, I have gotten 3% of sale price approved many times for an FHA buyer. I suggest providing the buyer's side of the HUD/CD and also get a closing cost worksheet from the buyer's lender outlining all costs. This has helped in the past. I most recent had 3% concessions approved last week for an FHA buyer. Hope this helps.

Comment by Chad Gelsinger on September 12, 2018 at 9:12am

Hi Al,

FHA Preforeclosure Sales allow 1% of Buyer's FHA Loan Amount for closing cost assistance. A variance can be requested for 1% of Buyer's Conventional Loan amount. We can typically get 1% of Sale Price approved, but the regs are for Loan Amounts. 

There are ALLOWED and DISALLOWED EXPENSES under HUD guidelines. See attached.FHA%20Allowable%20Expenses%20Udated%2001-2014.pdf Chad. 

Comment by Al on September 12, 2018 at 9:00am

What is the maximum allowable closing cost assistance. For fha pfs can I ask for 2% of sales price? 

Comment by Neddie B. on August 29, 2018 at 4:59am

Thank you @Dean and @Brett.


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