"Subject To" Purchase from a Motivated Seller (HUD Home)

4 Replies

Hi BP,

Quick question that I can't seem to get a straight answer on:

I have a VERY motivated seller who needs to sell their home, like, yesterday.

The only potential red flag I see is they purchased the home from HUD in 2007.
Payments and taxes are all up to speed, but they only have about $20k in equity.

Is this a deal worth exploring as a "Subject To" purchase?
Or should I steer clear from this sort of scenario? I'm a bit foggy on the rules around HUD home purchases and creative financing.

Any advice would be greatly appreciated!
I really want to help this seller out, but not sure if it's even possible.  

This not a "HUD home". It doesn't matter who they bought it from, only who their mortgage is with, and due on sale possibilities with that lender.

@Jon Acosta

Like Wayne said, it matters who the mortgage is, what the balances are, what the interest-rate is, whether or not it's fixed for an ARM, etc

If it's low equity then you can look at lease-option assignment or a subject to or some kind a wraparound mortgage or installment land contract

On a sub to or wrap or ILC, you have a due on sale possibility so I would recommend that you resell it for cash as soon as you buy it.

@Wayne Brooks & @Brian Gibbons ,

THANK YOU! I thought that was the case, but couldn't get a straight answer from searching.

To clarify: Since I'm attempting to purchase this home from the Seller, and not HUD directly, then I'm clear to at least explore the possibilities of creative financing for this home. 

I'll gather more information regarding the low equity and details of the situation.
But this is a great start.

Georgia is a wonderful creative financing state

Learn subject to, land contracts, land trusts, subject to, private lending, and joint ventures.

You can easily assign sale and purchase agreements with George's laws and not be licensed

@Curt Smith

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