Did you know you don’t have to be “upside down” in your mortgage to use the HAP program? That’s right! Military members who PCS’d from Eglin Air Force Base, Hurlburt Field, Duke Field or Whiting Field should know their options! Most people think HAP is only used to avoid short sale or foreclosure when the airman, marine or army member is PSC’d (Permanent Change of Station) and must sell. This is not the case. I’ll explain that in a moment, but first, here is a review of the basic criteria to us HAP.

1.      The home was the primary residence at time of PCS orders.

2.      The market value of the property has dropped at least 10% since the original purchase.

3.      Orders to move were dated between February 1 2006 and September 20, 2010.

4.      The home was purchased or purchase contract was entered into prior to July 1, 2006.

5.      The service member’s PCS orders were for a move at least 50 miles away from the previous base.

There are two ways to use HAP as of today. The third option, Government Assisted Private Sale (GAPS), where the service member could get a check at closing in some cases, unfortunately ended in January 2012. (In fact, I had a HAP GAPS closing in Navarre Florida on the last day of the program.) What are the two remaining HAP options?

1.    HAP Government Acquisition- In a nutshell, we list your Navarre, Crestview, Destin or Fort Walton Beach home for sale and find you a buyer. You enter into a contract with the buyer “contingent on HAP approval”. The U.S. Government then substitutes that contract with their own, pays off your upside down mortgage, and sells the home to the buyer we found.

2.      HAP Private Sale- We sell your home. If you are upside down in your mortgage, you bring the funds to closing or do a short sale. The U.S. Government will then either reimburse you based on their calculations, re-pay your VA entitlement if it was a VA Compromise Sale, or simply pay you if you were not in a short sale or foreclosure situation.

That’s right! You do NOT have to be upside down, facing foreclosure or trying to avoid a short sale to  use HAP. In fact, I’ve worked with Eglin Air Force Base personnel who had no mortgage use the HAP program to recoup some of their lost market value and put cash in their pocket! What is the calculation for a HAP private sale? You will get 90% of your prior fair market value (include your cost of verifiable home improvements) plus reasonable closing costs reimbursed to you. Here is an example:

Your home Prior Fair Market Value       $200,000

Cost for adding swimming pool               $30,000

90% of $230,000                                      $207,000

Sell your home for                                 $130,000

HAP Benefit                                            $77,000

Closing Costs 7%                                      $9,100

In this case, you would get a check from HAP for $86,100 after closing per current HAP guidelines.  In fact, I have a seller who currently has no mortgage using the HAP program, and getting pre-approved for his post-closing benefits as part of his contract contingencies. So, if you thought HAP was only to avoid short sale, think again. This opportunity is really a gift, and the funds may run out.  If you PCS’d from Eglin Air Force Base or Hurlburt Field, and have a home in Navarre, Destin, Fort Walton Beach, Crestview, Milton or Santa Rosa Beach Florida, call or email me to discuss your options at itswendy@rulnickrealty.com or 850-650-7883.