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Avery Gordon
7 months ago
I'm trying to buy the perfect home for me for about $28,000. The seller's agent does not list this home as a Cash Only sale, but insists that she won't sell it any other way. This home has been listed for 280 days now. Why can't I buy this home with an FHA Loan?
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Best Expert Answer
Joe Wallace
7 months ago
If you're asking why the seller won't accept any other form of payment, you would need to discuss that with the seller. If you're asking why FHA loan rules would not permit you to arrange the purchase of the property in a way that would be acceptable to that particular seller, it's important to understand that FHA single family home loan rules (as printed in HUD 4000.1) do not permit the borrower to receive cash on a forward mortgage transaction that is not a refinance except in the form of legitimate refunds of money paid up front that was later financed into the loan amount.
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Best Expert
Avery Gordon
7 months ago
If I use my FHA loan to purchase another property and my own home sells within a month, am I permitted to pay off that loan without a Prepayment Penalty?
Joe Wallace
7 months ago
For FHA mortgages, FHA loan rules in HUD 4000.1 state, "The Mortgagee must accept a prepayment of a Mortgage in whole or in part on any Installment Due Date without penalty to the Borrower." There may be certain procedures required to make a pre-payment depending on when your loan was closed, so you should check with the lender and read over your loan agreement to insure you know what any such procedures may require. If you are asking about non-FHA loans, you will need to review the terms of your loan agreement to see what may be required and discuss with the lender your desire to pre-pay and learn what may be possible. State law and lender standards may apply in addition to what's mentioned here.
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