It sure seems like we're faced with many more challenges and far fewer tools to work with these days, especially in the Fort Lauderdale mortgage market. The massive foreclosure and short-sale issues have left many Florida homeowners with negative equity. This coupled with Florida's "Declining Value" Tag and more restrictive underwriting guidelines, have made it very difficult for many to find a Fort Lauderdale mortgage solution.
CMPS Mortgage Professionals, like myself, are commited to solutions and results. Many times my heart goes out to a family that is paralyzed by their housing problems and exasperated and humiliated by how they been treated. Often times I don't have solutions for them, but I do treat them with empathy, patience and respect. I try to give them good information, advice and some hope for the future.
I recently received a referral from a CPA that was trying to assist a Mom to sell her home to her daughter. The daughter had recently graduated from law school and started an entry level job. Of course, she had a lot of student loan debt too. Mom had recently remarried and was moving out-of-state. They wanted to obtain a Fort Lauderdale mortgage for the daughter, but had been turned down by their bank due to high debt-to-income ratios and insufficient income.
These days it's difficult enough to deal with lenders on Non-Arms-Length Transactions, especially without a Real Estate Agent involved. You already know the bank is going to ask for the buyers grandfathers' birth certificate and original social security card just for starters. Now, here's the kicker, Mom offered to co-borrow for the daughter's Fort Lauderdale mortgage, as well as sell her the home. Isn't that kind of like being the buyer and seller at the same time?
At first glance, I didn't think it would be possible. However, a combination of seeing how much Mom wanted to make this happen for her only child and my not wanting to say no, I decided to see if there was some way to get this done. So, just to recap; we have Mom selling her home to her daughter and also being the co-borrower on her loan. What are the chances of that happening?
I knew this wouldn't fly with Conventional financing and even my Portfolio banks said too incestuous for us. I decided as a last ditch effort to email the FHA support desk to see if there was some way for me to structure an FHA Fort Lauderdale mortgage with these circumstances. Wow, was I surprised at the response I received from FHA.
It turns out that under HUD's Non-Occupying Co-Borrower guidelines, a parent may sell a home to a child and also co-borrow with the child on the FHA Fort Lauderdale Mortgage. The only caveat was the loan-to-value was limited to 75%. The clients were able to work with this and actually closed a couple of months ago. Mom has already referred me a second home buyer and the CPA that referred them continues to see me as his go to Fort Lauderdale mortgage guy. Going the extra mile can be personally rewarding and put a few dollars in your pocket at the same time.
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