[Greg]

As my career I would not tie myself into these and risk the loss of the ability to lend possibly forever.

This would take some title company cooperation though. In your example the HUD would not balance out and it would likely not fund unless title claims 27k was dp.

The way I see these handled in some cases is they disclose the second to the lender and rip it up post closing using a price increase to cover the money needed by the seller.

Alvin it just is not worth the risk. Most times this is done by brokers who cannot use FHA too. This year FHA changes big time on property evaluations. Less cosmetic items need repaired. Nearly all the blunders of FHA property inspection are erased and re-created close to Fannie Mae.

FHA will do 97% and a 3% dp assist to acheive 100%. A rehab loan to if the property has structural damage. No credit score requirements.

So in the past investors had issues selling to a buyer with FHA financing. Those troubles are supposed to be over now. (1/1/2006)