Posted by Nate on March 13, 2001 at 22:56:17:
Either way, it’s HIS problem, not yours. If he makes a profit, he has to give some of it back to the government.
Frankly, he shouldn’t be making a profit. Or rather, let me rephrase that. You should not even be thinking about paying a price high enough that someone who bought 2 years ago is going to make a profit.
The only way I see to make this deal happen would be to take it subject-to (don’t give him a dime more than he owes on the mortgage!) and sell on CFD or lease-option it.
The problem is that these state bond programs are not like most lender that, even if the due on sale clause is violated, will not call the loan if the payments are current. These state bond loans usually have VERY strict provisions about owner-occupancy, when and how they can sell, etc. etc. You can expect that the state bond folks WILL eventually find out if he gives up the house and they WILL call the loan due if the house is not owner-occupied.