The FHA offers homeowners from the age of 62 a reverse mortgage (HECM). It allows seniors to turn equity in their home into regular cash payments. Since older owners are often targeted by fraudsters, the addendum to the HUD-1 settlement declaration for use with sales contracts with heCM has been developed. The senior, the seller and the trust agent sign the addendum. At the time of signing, the seller certifies, to his knowledge, that the buyer only uses a HECM purchase loan to purchase the house. It also prevents the seller from bringing a senior with an HECM to buy his house with the promise of repaying it after the closing of the trust, or from making loans or concessions outside the contract or doing it faithfully. FHA`s mortgage insurance programs are for first-time residents, with a few exceptions. Most sales contracts stipulate whether or not the buyer plans to use the house as the principal residence. In addition, the Residential Loan Application uniform, which fills the FHA buyer, requires occupancy status for the home. The FHA also requires a buyer to certify, through the HUD/VA additive to the residence loan application, that he wants to live in the house.
It verifies that the buyer will live in the house for the majority of the year and that they intend to occupy it within 60 days of closing. All of these precautions contribute to investors not using FHA`s credit programs to purchase real estate. Additional flames, or Addenda, help the Federal Housing Administration (FHA) protect FHA buyers and the agency itself. FHA buyers often have credit problems and lower incomes, and they may also be more vulnerable to fraud. Lenders that authorize and lend to the FHA ensure that buyers, sellers and their representatives sign specific rights to the sales contract. The FHA-Amendatory Clause protects the buyer`s down payment if the valuation of the home is lower than expected. An evaluation is a professional valuation based on comparable sales in the region and sometimes below the sale price of a sales contract. The maximum amount of a buyer`s loan is granted on the basis of the value assessed. It helps the lender protect its financial interests and can give the buyer a guarantee that a home is worth at least the amount they have agreed to pay.
The amendment clause lets the seller know that he cannot simply keep the buyer`s deposit because of a low valuation. In addition, it prohibits the seller from charging a penalty to the buyer if the value is less than the purchase price. The additional certification of the real estate requires agent signatures in addition to the signatures of the buyer and seller. It certifies that anyone who signs takes all the terms of the sales contract in his soul and conscience. It also confirms that the signatories have not entered into secret agreements on the site. Certification helps avoid agreements between agents, buyer or seller, which may include renegotiated or added terms, such as a new sale price, sales credits and kickbacks for real estate agents. FHA supplements add provisions and enhance protection already in a sales contract. They protect the buyer and lender of the FHA from misrepresentation and can also protect a buyer`s deposit. Karina C.
Hernandez has been a real estate agent in San Diego since 2004. She has also worked as a mortgage originator and real estate transaction coordinator. She has a B.A. in English from UCLA. Over the past 10 years, Karina has written thousands of articles for a variety of online channels, including eHow, sfGate, Nest, Quicken, TurboTax, RE/Max, Zacks and Opposing Views.