Can you do an FHA Short Sale without a hardship?

FHA loan on 4 family. One unit owner occupied. No hardship. Owner has a very good paying job. The property started having structural issues in that the front porch is pulling the property apart (big crack in ceiling) Had evaluated by structural engineer. Estimated cost to repair $15,000. Owner does not have fund to repair and is concerned for safety of tenants. Can this property be a Short Sale? How do  you get around the hardship issue?

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Permalink Reply by Dean E Eshelman, CPA, CDPE, IRES on August 27, 2013 at 3:58pm

@Brian Avery Is a variance a possibility?

Variance - A Lender is required to submit form HUD-90041, Request for Variance Procedure on any Loss Mitigation Option where all HUD requirements have not been met. These Variances are to be submitted via EVARS System. All Variances are considered on a case-by-case basis. When preparing a Variance for Special Forbearance, Trial Payment Plan, Loan Modification, Partial Claim or Deed-in-Lieu, the Lender is to select "other button". When preparing a Variance for the Preforeclosure Sale Program and FHA-HAMP Option, the Lender is to utilize the drop down menu and select the appropriate choice.

Permalink Reply by Kevin - Greenville, SC on August 28, 2013 at 2:25pm

This is probably not going to apply but just fyi.  

portal.hud.gov/huddoc/13-23ml.pdf

HUD can't grant a variance for really any reason it chooses that fall outside the Servicer's delegations covered in Mortgagee Letter(s) or other Guidance.  It's a business decision.

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