Posted by JPiper on December 05, 1999 at 11:03:52:
Remember?.there?s a distinction in this loan if it is what I think it is. Bond money is first time buyer money?..and is for owner occupants. Typically the requirement to assume is non-qualifying in terms of the FHA loan (if it is originated prior to Dec 15 1989), BUT the bond money part of the deal requires that the buyer be a first time buyer and an owner occupant…and is approved a separate state agency from HUD. Here, that agency is named Missouri Housing Development Corporation (MHDC). First time buyer for the purpose of this type of loan means someone who hasn?t written interest off on their tax returns in 3 years. HUD is not the ONLY regulatory body handling this type of loan. Approvals are issued at two levels…HUD and MHDC (or whoever it is in your state). Also keep in mind that there are variances in these programs between programs and probably between states. Again, read the documents.
A few considerations. I know all kinds of people renting out houses that have loans of this type on them. But then again, these houses are not under the microscope. This one is. This lady has evidently stirred things up enough that the lender is now ?mobilized??.perhaps the lady has even missed a payment of two unbeknownst to you.
One approach that could be taken here would be to do a ?streamline? refinance on this property. FHA has a program which allows ?non-qualifying refinances? on old FHA loans. The seller could refi with this program which pays the old loan off?.removing the problem concerning renting the property, first time buyer, etc. However, in doing this you create a new problem?.an FHA loan that now is qualifying?.it has a due on sale clause. Personally I think this one is easier though than the first time buyer, owner occupant thing.
The other choice here is to obtain an option on the property. Find the buyer. SELL to that buyer allowing THEM to take over the loan. AGAIN, they will need to be first time buyers and owner occupants. You can create notes for the equity involved.
No matter how hard you try to push the round shape of a lease/option into this square hole?.it won?t fit. So what? You can accomplish the same financials in another way.