I currently have an option contract on a property with an FHA loan. I was wondering if I should cancel it, because I read that the FHA requirements for acceptance are 88%-30 days 86%-60 days and 84%-90 days or more, of the APPRAISED value. They require an appraisal and not a BPO. Is this true.
Should I even bother? Has anyone had success closing a short sale with an FHA loan?
Note: I am not talking about the buyer who I resell to, I am talking about the homeowner having an FHA loan.
Any input would be appreciated.
those are the minimum threshold requirements for Fannie Mae on FHA loans, so the buyer would need to submit a purchase contract which nets to the lender those percentages.
A couple of weeks ago, we started receiving from Fannie bank release documents prohibiting a second transaction within 30 days. There are legal problems with that so you should talk to a good real estate attorney in your jurisdiction concerning the ramifications, and whether you are safe to double close anyway. I am not giving you legal advice, just telling you to talk to a competent real estate attorney.
The minimum threshold is the net to lender percentage of the fair market value. So, after all costs and fees, the lender must receive that percentage.
Some SMI’s (secondary market investors) require a full appraisal by a licensed appraiser. Others only pay for a BPO.
We have had a measure of success (so far 100% but that can’t hold) in appealing lender-paid appraisals/BPO’s that were way out of line, but there are good strategies to help them do it right.
Good luck.
Ken