I'm pretty sure I know the answer...here's to hoping for different answer!

Short Sale participation letter states: "If the loan is FHA insured the seller cannot pay the Buyer’s closing costs". Q1. That's my seller's loan, right? Not the buyer's. Buyer's agent wants it to be thier-side so they can go conventional if need be. I believe/know it's the seller. Q2. Is it possible to request a variance with ANY SUCCESS? (Please say yes and how I go about getting it.)

It will be difficult to get a (current or new ) buyer to purchase without closing costs.

Thanks!

 

 

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You need to be more specific, I'm confused with you questions. 1) What kind of variance are you talking about. 2) are you talking about seller concession's when referring to closing costs. The seller can't pay buyers closing costs, if he could he can pay a cash contribution etc.

Just need to know:

- when the participation letter states "If the loan is FHA insured the seller cannot pay the Buyer’s closing costs," is this the seller's loan (I believe it is);

- if it is the seller's loan, is it possible to get a variance to have closing costs included in the sale from FHA/HUD? And what is the best way to get the variance with success?

The seller can contribute 1% to the buyers closing costs IF the buyer is getting FHA financing. If the buyer is NOT getting FHA financing then the seller cannot contribute anything to the buyers closing costs. You can apply for an exception. However it's probably easier to find a buyer that doesn't need closing costs assistance.

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!

Do you have the FHA line number by any chance? I have a second mortgage that is with HUD yet the negotiator tells me they need to submit a variance but she cannot tell me if its for that second lien HUD has or what she says is two different things can any one help me out here please?

Finding a buyer who doesn't need closing costs assistance in my market is like finding a needle in a haystack....

Bryant Tutas said:
The seller can contribute 1% to the buyers closing costs IF the buyer is getting FHA financing. If the buyer is NOT getting FHA financing then the seller cannot contribute anything to the buyers closing costs. You can apply for an exception. However it's probably easier to find a buyer that doesn't need closing costs assistance.
Thanks Vanessa! I sent a request to my Negotiator and am crossing my fingers, toes & eyes that it comes back approved quickly.
Excellent! It normally takes about 48 hours. If I were you, I'd go ahead and send in my 3rd party authorization to the FHA Servicing Center (make sure to include the FHA case #), so that they will already have it in their system. Then, I'd call the servicing center directly to see if the variance was approved. #ihatewaitingonotherpeople.

can you provide the fax number please? This is the first time I run into this believe it or not and I am quite lost here ;( Thank you much!

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

 

Alisa

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

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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