DULCIE CRAWFORD

FHA Guidelines for Short Sales

The U. S. Department of Housing and Urban Development released this guideline effective immediately regarding Short Sales and Short Pay Offs. In outlines the conditions of eligibility for a new FHA-insured mortgage after completing a short sale on his or her principal residence.

In summary:

Borrowers are not eligible for a new FHA mortgage if they pursued a short sale agreement on his or her principal residence simply to

• take advantage of declining market conditions, and
• purchase, at a reduced price, a similar or superior property within a reasonable commuting distance.

Borrowers are considered eligible for a new FHA-insured mortgage if

• they were current on their mortgage and other installment debts at the time of the short sale of their previously owned property, and
• the proceeds from the short sale serve as payment in full.

Borrowers in default on their mortgage at the time of the short sale (or pre-foreclosure sale) are not eligible for a new FHA-insured mortgage for three years from the date of the pre-foreclosure sale. Lenders may make exceptions to this rule under certain circumstances.

You can download the complete guideline here:

HUD-FHA Guidelines for Short Sale courtesy of The Dulcie Crawford Group