If you are exploring the idea of a Nashville short sale, you may be wondering, "can I do a short sale on a home that is an investment property or a home that was my primary residence, but is now rented."
There are many people in Nashville and Middle Tennessee that bought investment real estate but now find themselves with a cash flow shortage and a property that is worth less than they originally paid. Others bought a home as their primary residence but suffered some sort of financial hardship (job loss, death of a family member, mandatory relocation, marital separation etc.) and were forced to lease their home for a period of time. I frequently get calls from these Sellers asking if they qualify for a short sale.
The answer is "Whether or not you qualify for a short sale on your investment property depends on the type of mortgage you have and the guidelines of the investor behind that mortgage." Many conventional mortgages will allow for a home that was purchased as an investment to go through the short sale process. In my experience, the bank is more likely to ask for a promissory note or a cash contribution from a Seller on an investment property.
FHA and many other government backed mortgage have vey strict guidelines on homes that were rented. FHA mortgages are intended for owner occupants. In Nashville, the borrower is almost always asked to sign an affidavit at the closing of an FHA mortgage stating that he or she intends to occupy the property as their primary residence. Therefore, a short sale on an FHA mortgage where the owner has not resided on the property (or has had it rented) for more than 18 consecutive months is often not possible.
As always, there are exceptions to every rule. If a borrower dies, must relocate for work and can not sell the property, loses a job and rents the property while trying to find another job, the investor will sometimes make exceptions. These exceptions must be well documented with letters explaining the documentation. Every investor and every mortgage is different. If you are considering selling a property via short sale, consult with a competent real estate agent that specializes in short sales!
Visit us online for more information about the nashville short sale process: www.Avoid4ClosureTN.com
Call or e-mail us directly for help with your short sale or general questions about the process: info@ArmstrongRealEstateGroup.com / 615-425-3610
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