Buyers who came to my FHA short sale listing had an FHA loan. We asked for a variance and got them 3% closing costs. So it is negotiable, and more likely if you come in within their net amount.
I just got this on Bank of America on a VA loan....so may not be restricted to FHA
If FHA is netting more than their net they could request a variance to get it paid but if those figures are tight, no they will stay with the 1% only.
Example, you have to net them 88, 86 or 84% depending where you are after the ATP is received.
So for example lets say you are at the 86% net and your offer to FHA will net them over that 86% and even more than 88% then the rep may request a variance but you must ask for it because most of them will not submit one unless you ask for it..
FHA PFS Guidelines are for 1% of the Purchaser's Loan amount, but a variance will allow for more even if the Purchaser is not obtaining a FHA Loan.
I've done them with FHA loans on FHA short sales as well but it does require a variance. And HUD does not have to grant a variance. As others have pointed out, if your offer with the 3% concession is above the minimum net, you'll probably get the variance. However, if you are in a competitive marketplace with multiple offers, you would probably be better off writing your offer with only a 1% concession, if your buyer doesn't want to gamble.
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