07/13/2011 by Dean Henderson, CRMS
When there is a Short Sale(AKA Pre-Foreclosure Sale) on a HUD, FHA loan, and the new Buyer is also getting a new FHA loan, HUD only allows up to a maximum of 1.0% for Seller’s Concessions or Allowable Closing Costs. If you see the link below, and look at page 2 of 18, the sixth bullet point down, and it is there that you will find this.
HUD will only allow 1% Seller Closing Costs (line 509) and that is ONLY if the buyer is using FHA financing. Any other buyer financing HUD will allow 0% for an FHA Short Sale.
http://www.hud.gov/offices/adm/hudclips/letters/mortgagee/files/08-43ml.doc
Here are some more HUD/FHA Pre-foreclosure guidelines:
pre-foreclosure? I do alot of HUDS in Illinois and they will allow up to 3% if you buy an actual HUD foreclosure.