no FHA loan for double closing/assigned contract ? - Posted by Carol
Posted by Carol on July 15, 2003 at 17:00:26:
To clarify better, HUD says they won’t give FHA loans for a single-family house to a buyer if they are buying from someone who has owned the property for less than 90 days or from someone with an assigned contract.
I’m trying to get into sandwich lease/options, and this blows double closings and assigned contracts out of the water.
I’ve heard to have the original seller give me a promissory note & mortgage in the amount of my profit, then have my tenant/buyer buy directly from the original seller.
Wouldn’t the seller get ticked off to see how much profit I’m getting that could have been his/hers? What if the original seller refuses to cooperate? What if the original seller waits for my option to expire, and deals directly with my tenant/buyer and cuts me out?
At what point do you tell the tenant/buyer about the potential FHA loan problem? Or do you?
Any better solutions? It seems like there’s an awful lot of potential for major problems when the tenant/buyer is ready to buy, and it’s really making me rethink lease options.
How do I protect myself with this HUD ruling? Any reassurances?
Thanks for the input in advance! Carol