Check the Details before Selling your Home
Sellers, did you get a special loan or grant when you bought your home or post-purchase for updating? If so, you must look into the details before you decide to sell.
Buyers love special loans and grants to purchase properties. Why pay for something yourself when there’s “free money” out there? Why go through conventional underwriting when you can cut red tape with special financing? The problem is that these boons often come with strings attached.
The most common strings involve time. You may be forced to own the property for a certain amount of time. Other timelines are even stricter, requiring both ownership and owner-occupation of the property. Owner-occupation is just that; you must occupy the property as your primary residence. Not only are you forbidden from renting the property, but you cannot even leave it vacant and while keeping up the mortgage.
Some special financing programs require that the financing be paid off before the property is sold. For example, you have a standard mortgage through a bank and a second special loan through a special program. The program requires that the loan be completely paid off before you even list your property. These loans cannot be paid off with closing proceeds. These issues also arise for rehab loans and sometimes for historical property renovation.
If you want to sell your home but aren’t sure if a special loan or grant will get in the way, please let me know. I will be happy to help research your program and assist you in finding lawful ways around whatever rules you face.