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Can the equity from a sellers short sale home go towards the buyers down payment?

April 26, 2017Buyers down payment equity Home sale seller short

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Can the equity from a sellers short sale home go towards the buyers down payment?

1 Answer

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10 Posted

There is no equity in a short sale. Remember, a short sale is when a home owner owes more than the value of the home. They are asking the lender to sell the home for less than what is owed. There is no equity in a short sale. Any money reduced by the lender is only reduced to the value of the home and nothing less. There are several professionals that ensure the lender is getting top dollar for the home. Appraisers, Broker Price Opinions, CMA’s and asset managers all ensure the value is in line for a short sale. In today’s market, the only type of down payment that can be given is from a direct family member. This is the only down payment assistance allowed through FHA and CONV financing. Please email us with any other questions regarding this.