What are the Hazards of SubjectTo with FHA Loans?
I have a property under contract which I am planning to go subject to on, while performing due diligence, running title, getting pay-off, reinstatement, escrow balances and so forth I also determined that the loan is an FHA, NOT conventional. I am trying to get a feel for the risk involved with going subject to on an FHA loan versus conventional.
What are the hazards of purchasing a property Subject To an existing FHA loan? (what specifically are the increased risks versus conventional)
- FHA black list ramifications?
- Due on sale clause more likely to be evoked with FHA?
- Title companies do not appear willing to issue title insurance or orchestrate closings on these loans... I have a title report showing that the only lien is the original mortgage
- If I flip the property or refinance the FHA loan out in a year to hold the property as a long term rental does that drop the risks substantially as then this property would be Subject To for a short time frame.
The deal gets too tight for comfort if I were to purchase the property outright with Hard Money, hence the Subject To angle.
Input is appreciated!