USDA loan won’t allow sale
Hello all! I have found a medium multi family that is off market at this time. Owners are trying to sell but, are telling me USDA won’t allow them to sell. Question is why would USDA not allow a sale? Can they keep you under contract? The property does use subsidize housing assistance. I was told their USDA loan doesn’t mature until 2030 and won’t allow them to sell or pay off early.
I just asked about owner carry (waiting on a reply)
Also, what other creative ideas could I use?
A ONERD loan? Housing Finance Second? DAP 3rd? My guess is they can pay off BUT there is a prepayment penalty of like 2.5% ? Ask them to show you the note(s) they signed. If you need help reading and interpreting, just whistle
Agreed with @Caroline Gerardo that I doubt USDA 'won't allow them to sell', and it is more likely they received some assistance or agreed that they would pay a pre-payment penalty if they sell before XX date. So they can sell and USDA will allow it if they pay the fee. Of course the mortgage note will clearly state what they agreed to and what the remedy is.
@Matt Devincenzo that was my thought also. I can’t believe that they can keep them “under contract” and not allow sale. I did consider pre payment penalty but that would be easy to navigate. I haven’t dealt with subsidized properties before and didn’t know if being in the program would limit the sale?
Thanks for the reply!
@Caroline Gerardo I will look those loans up and see if they would be willing to share their info. They’re speaking with an attorney now. I am hoping to help come up with a solution that works for them. Thanks for the reply and offer to check it out.
Don't spend the money on an attorney. I might be able to pull the copies if they were recorded, give me address in message dm. I am positive I can read the legalese and translate. Seller owner can also contact servicers and lenders to see if they would grant a waiver. Golden handcuffs that were intended to stabilize low income housing under certain terms and conditions