HUD Variance Short Sale Help

Homeowners who purchase their property with a Federal Housing Authority (FHA) loan and needs to short sale will be reviewed for the Pre Foreclosure Sale Program (PFS ). This is many times referred to by individuals as a FHA short sale. The PFS program is governed by HUD guidelines. Some of the important guidelines are in relation to owner occupancy, delinquenecy, and the NET to the mortgage servicer based off the approval to participate issued. On the HUD website it says the Borrower must occupy the property as a principal residence to be eligible to be reviewed for a short sale. Mortgage servicers are authorized to grant reasonable exclusions to non-occupant borrowers needing help through the PFS Program when it is clear that the subject property was not purchased as a rental investment, or used as a rental for more than 18 months. If the home is non-owner occupied or if any of the numerous guidelines are not fully being met a variance request may be placed. A HUD variance is a request the mortgage servicer will place to HUD for approval review. A variance is a request to bend the guidelines in regards to certain matters. For example a variance can be placed for one of the following reasons:

• The property is vacant and you want to be reviewed for a short sale
• The Approval To Participate has expired and you want to extend it.
• The appraisal is expired and you want to try to extend it
• There is a partial claim on title and you want HUD to cover it.
• To approve borrower relocation that may of been denied.

Variances are crucial proponents when processing a file through the PFS program and you should know when to advise the banks to request one. We have found that certain variances are not requested unless if you push and ask for one.

For assistance with anything short sale related please fill out the form below or call 1-800-692-9960 anytime.