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Petra Norris' Blog

By Petra Norris | Broker in Lakeland, FL

Lakeland FL Short Sale: Is Your Home Insured And You Need To Sell As A Short Sale?

Lakeland FL Short Sale: There exist numerous short sale programs to assist distressed home owners in selling their home. One of these programs is the FHA insured home loans. Let’s take a look at the requirements needed to get your home approved for a short sale under the Pre-Foreclosure Sale (PFS) Program guidelines by the FHA (Federal Housing Administration).

Here are the eligibility requirements to successfully complete a short sale:

 

§  The home must be owner-occupied, except for cases of job transfer, job loss, divorce, death, and the property was not purchased as a rental investment, or used as a rental for more than 18 months.

§  Homeowner must be 31 days behind with your payment at the time of sale/closing

§  You must have a written proof of decrease in income and your impotence to pay your mortgage through loss of job, death, etc.

§  You must acquire an approval to engage in the FHA/HUD Short Sale program before the application.

§  The home must be actively marketed for 120 days (up to six months) – restrictions apply as to what amount lender may accept:  First 30 days of marketing the lender (mortgage holder) may only accept offers resulting in a minimum net sale proceeds of 88% of the as-is appraised fair market value (FMV).  The succeeding 30 days, the lender may only approve $86% of FMV and consequently, short sale lender may result in a minimum of 84% FMV.

 

Given below are allowed settlement costs:

§  Sales commission not to exceed 6%

§  Up to 1% of buyer’s first mortgage amount if sale includes FHA financing

§  Discharge of junior liens if closing occurs within certain time frames of closings.

§  Reasonable “seller costs”, such as local/state transfer tax stamps, title search and owner’s title insurance

Given below are settlement costs that are not allowed:

§  Home Warranty fees

§  Repair reimbursements or allowances

§  Lender’s Title Insurance fees

§  Discount points or loan fees for non FHA-financing

 

Please note that these are guidelines hence, may change any time. To know more about how to do a Lakeland FL short sale through this program, just click the links below:

 

HUD/FHA Pre-foreclosure Sale program (PFS) 

FHA/HUD National Servicing Center.

If you need to sell your home as a short sale, feel free to contact Petra Norris at brokerpetra@gmail.com for more information.

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