Good morning!
Our team is taking a listing with the seller's approved for the military family HAP government program.
We are HAFA certified and know that process - not familiar with this program.
We've printed out everything possible from the gov't website, tried to look up info. on our association website, but no info. on how the process works from the realtor's side.
The property being listed has a shortfall of approx. $70K, not including selling costs or commission's. One loan which is conventional.
The HUD in the example show's the seller with a deficiency which apparently is what the gov't program is about.
*How does this work with the lender? It's technically a short sale.
*How do we inform the lender of this type of sale?
*Do we have to go through a short sale process to get it approved, or does the lender abide by the HAP guidelines of getting the monies after the sale of the property?
*What additional contracts do we have to provide to the lender?
*What do we have to provide to the seller to submit for reimbursement? Theoretically, they're not putting money out because the house is at a loss - the lender's loss.
We appreciate any insight you can give us! As you know, every transaction is so different and it's tough to keep up on every program and become an expert at much nowadays!
Thank you!
Kathy
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Kathy, I've been going through this since mid April on the buyer side (listing agent only disclosed the seller was going through HAP after the counter was signed). I had to do a lot of research by talking to lenders and anyone in the office who had been through one (one agent in our office was the 4th in the NATION last year to utilize the program). From my understanding, the seller has to call HAP and be approved for the program first before placing the home on the market. The price listed has to fall within their parameters of not to high and not too low of market value, and not sell too fast otherwise they may think it's a firesale (it's in one of their online brochures). The contract is contingent on HAP approving. It technically isn't a short sale as HAP buys the home from the seller and then turns around the sells it to the buyer (with their own contracts). It's more like a relo company transaction than a short sale. HAP (depending on where you are at in the nation) may also process those seller's according to their PCS dates (those that are leaving sooner get processed sooner). All things for the seller to ask HAP about. We are supposed to close by the end of this month and HAP never responded to the buyer side calling them to ask when they might approve the sale since my client is relying on the tax credit (good thing that was extended!). HAP may also ask the seller to come out of pocket with the difference of what is owned compared to the purchase price, and then reimburse them within a certain period of time. Not certain how or when they may make that decision. If the seller were my client, I would certainly try to be on the phone with HAP the same time they are asking all of these questions.
Hope this helps you a bit.
Juanita
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