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New FHA short sale guidelines for PCSing military families

Posted by Susanna Haynie on October 29, 2012
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A PCS enables you to do a short saleI am excited! Changes are coming for folks that are facing a short sale. Particularly our military families will finally get a break!

Don’t get me wrong! Short selling your home will still be a pain… with stacks of paperwork, dings to your credit score and not to mention a stressed family and possibly a bruised ego. However, at least guidelines are easing, to do what’s necessary to move on.

PCS (permanent change of station) orders often require quick moves and can create hardship for military homeowners who are underwater on their mortgages and therefore cannot sell their home without taking a loss. Previously, many service members felt their only option was either to maintain financial obligations on two residences or to default on their mortgage.

Proofing “hardship” has always been the big problem for military families, as PCS orders were not considered as such AND the families had to be delinquent in their mortgage payments to qualify for a short sale.  This is changing. As of November 1st, there are new FHFA guidelines in effect for our military families:

To qualify for these new guidelines

  • you must have a Fannie Mae or Freddie Mac loan
  • the home must be purchased on or before June 30, 2012
  • you must have orders for a change of station (PCS)

Under the new policy:

  • There will be no deficiency judgment or any cash contribution or promissory note
  • military homeowners who receive Permanent Change of Station (PCS) orders will be eligible (qualify as hardship) to sell their homes in a short sale even if they are current on their mortgage.

Talk to your lender and your Realtor to discuss your options. If you live in the Colorado Springs area, feel free to contact me anytime. (719-321-0800)

Last year Fannie Mae or Freddie Mac issued guidance to mortgage servicers confirming PCS orders will be eligible (qualify as hardship) to sell their hoams in a short sale even if they are current on their mortgage. To see if their loans are held by them, they can call hotlines for military homeowners at 1-877-MIL-4566 or 1-800-FREDDIE.

  • The full news release with eligibility requirements can be found here.
  • Fannie Mae Military Information
  • Freddie Mac Military Information

NOT a military family? Changes are due for your as well on Nov. 1…

Link to Fannie Mae guidance available Aug. 22
Link to Freddie Mac guidance available Aug. 21

Read the details https://www.efanniemae.com/sf/guides/ssg/annltrs/pdf/2012/svc1219.pdf

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