Posted by BrokerScott (Mich) on July 20, 2003 at 12:49:57:
Just call the USDA office to find out the recapture amount, but it’s begining to sound like it might be easier to simply go to the auction as opposed to trying to help somebody that doesn’t want to help herself. Doubt that RD will negotiate, never seen it happen. Drop me an e mail about how it goes. Scott
Possible deal. Need help. USDA Rural Housing Loan. - Posted by Ernie Baxley
Posted by Ernie Baxley on July 19, 2003 at 15:07:12:
Does anybody have any experience with the USDA Rural Housing Service? I have what may be my first deal and I am in need of advice. The owner contacted me and wants to get rid of her house which is due for auction on 7/29. She said that she had purchased on a low income loan from the USDA. She is $4100 in arrears with a balance of $64,800. The comps are between $105-$115K. The house is in fairly good condition needing only paint and new carpet. My first question is does this deal sound doable. It is in No. California where housing prices are rising rapidly and there is very little affordable housing so I believe that I could fix it and sell it within 3-4 months. I am guestimating $4-5K for the fix up with the mortgage at $400 a month for another $1200-$1600. I figure another $6000 for RE commission if I sell at $100K. I would be into it for about $12K total netting between $15-20K. Is my addition right? The other main thing is how does the USDA Housing work? Are they different than a normal bank or do they want to foreclose? Is there any special laws when dealing with them. I would appreciate any advice you can give me. Thanks.
Ernie
Re: Possible deal. - Posted by BrokerScott (Mich)
Posted by BrokerScott (Mich) on July 19, 2003 at 20:48:30:
Did your payoff amount include the ‘interest subsidy recovery’? Ask for documentation because it can wipe out virtually any equity for the first few years. Tread carfully, Scott
best pass it by - Posted by gerald(tx)
Posted by gerald(tx) on July 19, 2003 at 17:00:34:
The problem with USDA (and similar gov’t low income programs) is that because you are getting low interest rates, they come around periodically to inspect and insure that the name on the loan is indeed the occupant.
You’re in deep doodoo when your owner doesn’t answer the door.
Never Sub2 on these type properties. Now, having said that, if you could resell it fast enough, before the inspector showed up…
Re: Possible deal. - Posted by Ernie Baxley
Posted by Ernie Baxley on July 19, 2003 at 22:29:06:
Scott,
What is ‘interest subsidy recovery’? I am a newbie but I am guessing that since the gov’t gave a low interest loan that they want reimburement for it…If so I didn’t know about that and didn’t factor it in…Thanks for the info…
Ernie
Re: Possible deal. - Posted by BrokerScott (Mich)
Posted by BrokerScott (Mich) on July 20, 2003 at 07:04:25:
Yes that is it exactly. The government’s point being that since they are subsidising the loans interest, they should get first shot at the equity up to the amount of interest that they subsidised over the years. There is however a cutoff after a number of years, and I cannot remember what it is except it was quite lengthy, when they will release the interest recovery claim. The local USDA office should be able to find the figures for you. Best, Scott
Re: Possible deal. - Posted by Ernie Baxley
Posted by Ernie Baxley on July 20, 2003 at 12:26:03:
Scott,
Do you think that I would be wasting my time by talking to the USDA people? I was hoping to be able
to help this lady out because believe it or not she is concerned about her credit. She also has no place to stay after her house is sold at auction and no money at all. I was hoping to give her some money or at least set her up with a place to stay. I imagine that it would be easier just to go to the auction on 7/29 as I have the funds to bid on it but I would like to think that I have at least tried to help her out. The opening bid at the auction is only the amount in arrears and the balance on the loan. Do you know if they would negotiate for a payoff for that amount or negotiate at all? I really appreciate the information that you have given me and I would be grateful for any additional advice. Thanks.
Ernie