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HUD Preforeclosure Sales Program: do you qualify?

If you're struggling to make your mortgage payments and can no longer afford your mortgage, the HUD Preforeclosure Sales Program may be able to help you sell your home and avoid foreclosure.

HUD Preforeclosure Sales ProgramIf you're struggling to make your mortgage payments and can no longer afford your mortgage, the U. S. Department of Housing and Urban Development (HUD) Preforeclosure Sales Program may be able to help you sell your home and avoid foreclosure.

The HUD Preforeclosure Sales Program helps you sell your home when you owe more on your mortgages than your home is worth. Through this short sale program, you use the money from your sale to satisfy the balance of your mortgage even if the sale price is less than the amount you owe. In most cases, the price that you're allowed to accept on the property is based on the length of time the house has been on the market as well as the appraised value of the house. 

Do you owe more on your home than it is worth? Click here to find out.

A home appraisal is an initial step in this program. Your or your prospective buyer must get your home appraised by a professional approved by the Federal Housing Administration (FHA). A qualified appraisal is good for 120 days. If you get an offer on your home more than 120 days after getting the appraisal, you may have to get a new appraisal. 

To qualify for the HUD Preforeclosure Sales Program, you must market your property on the real estate market for at least four months. During the first month your house is on the market, the lender may only accept offers that are at least 88 percent of the home's appraised value. During the second month the home is on the market, the lender may accept offers as low as 86 percent of the home's appraised value. During the last two months of the four-month period, the lender may accept offers that are 84 percent of the home's fair market value as determined by its appraisal. Relatives and business associates are not allowed to buy your home in the HUD short sale program. 

Under the HUD Preforeclosure Sales Program, your lender must waive the deficiency balance, which is the difference between what you owe on your home loan and your home's sale price. Although a short sale will show on your credit, it is far less damaging than a foreclosure. If you need a real estate agent to help you list your short sale, go to Reply! to find professionals near you.

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