On 4/24/2014, Amerifirst Mortgage posted this video (presented by Dan Moyle) on youtube advertising a recent change to FHA underwriting guidelines that will now allow buyers using 203k loans to overbid on a HUD property without having to pay the difference in cash. The video touts that "With the FHA 203k loan, borrowers can now bid on a HUD home based on what the value of the home WILL be, not what it is."
Providing the actual rehab cost isn't cannibalized by the amount of the overbid, this could be a game changer for buyers who need to reserve capital but want to compete against cash or conventional loan buyers.
For an EXCELLENT article documenting what we all hope this new change will help solve, see Dan Rosenberger's blog post from 10/1/2013, "When HUD Shows the As-Is Appraised Value as Zero - Be Careful."
We reached out to Dan Moyle and Amerifist Mortgage for substantiation and Dan quickly assisted with the official notice from HUD: ML 2013-44.
Amerifirst has been able to successfully get files underwritten in territories they serve, but as of right now, they are not in the Texas market.
We are seeking a Texas lending success story, as our current SMEs are stating that they don't have a successful approval instance for the overbid getting financed with the loan.