FHA to Subto mortgage
I am selling my FHA 3-family rental property. I have recieved an Subto offer on the house. Would I violate my FHA loan by taking offer and what are the pros/cons of Subto deals?
The pros are generally great pricing for the seller, sub-to deals often will have a premium on price as they pose a risk for the seller.
The cons is that the lender could accelerate payments if title changes, and the insurance companies may not pay a claim if they are not in the loop. It is a complicated. Definitely refer to you loan packet and search for the "due on clause" to see what they specifically outline in their terms.
If done correctly they can create almost something like an annuity for the seller and the balance of the purchase price you can negotiate the rate in which they are paying you back. Best of luck.