FHA has specific rules when it comes to purchasing a home that is in Pre-Foreclosure with a FHA mortgage on it. FHA doesn’t make mortgage loans, they Insure them – and so as the Insuring Agency (kinda’ like a PMI company) they get to set the rules! In those Pre-Foreclosure, Short Sale transactions, they set out what fees CAN be included from the Seller, and which fees can not.
The process for purchasing a FHA Short Sale is similar to other short sale situations in that the HUD-1 must have prior approval.
The item people need to realize, though, is that if the buyer is obtaining a FHA mortgage, the Seller can only pay up to 1% of the Buyer’s First Mortgage Amount.
We don’t have that many of these cases in the Raleigh, Holly Springs, Cary, Apex area – but when we do, the buyer needs to remember that they will probably need a little more cash upfront for the purchase.
If you are considering a mortgage loan in North Carolina, and you want more details on FHA Mortgage Loan Guidelines – please call Steve and Eleanor Thorne, FHA Mortgage Loan Specialists! We have over 20 years of experience providing homebuyers with the BEST mortgage rates available!