First Sub to. Looking for step by step

[Loren Souers]

Hi all. I am looking at doing my first sub to deal. I have done other types of creative finance but not this. Can someone give me a step by step process? Here are some details.

Loan is FHA. I have read that FHA do not have Due on Sale clauses. This is the part that worries me the most.

Seller is behind payments in the amount of ~$10K.

Seller wants to walk and maintain his credit with a little something extra. 

I'd rather not put into a land trust. 

What is the process of adding insurance and conveying title to me?

What are my risks here and how to mitigate those risks?

What if lender calls the loan for any reason?  How do we deal with that? Lease to own? 

Any other input and help is much appreciated. 

Thanks

Loren

[Patrick Roberts]

FHA loans absolutely have a due on sale clause; what FHA loans do that some other loans do not is that they allow for an assumption.

You're playing with fire with a situation like this. The only true cure for an acceleration is to have the cash or means to pay it off in full within 60 days of the demand notice. The likelihood of acceleration is significantly higher due to the fact that this loan is delinquent/nonperforming. Also, I personally wouldnt be meddling in a loan where the government is the creditor, but that's just me.