Investor Report: HUD Guidance - Investors and others who expect to use FHA financing in connection with a short sale better check out the latest guidance issued by HUD last week. Applicants for new FHA insured mortgages will be turned down - effective immediately - if they participated in a short sale of their principal residence, simply to “take advantage of declining market conditions,” or to “purchase a similar or superior property at a reduced price within a reasonable commuting distance” of the house they disposed of via a short sale. FHA rules generally limit consideration of rental income from a vacated residence as part of the qualifying income to purchase another property.
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