I want to thank the help of the forum for completion of 2 deals with subject 2 mortgage. Knowledge is power and I am excited about learning more. Thanks again.
USDA are often subsidized loans that give payment assistance to the borrower. Payment assistance is granted on direct loans to reduce the installment to an "effective interest rate" as low as one percent, depending on adjusted family income.
Payment assistance is subject to recapture by the government when the customer no longer resides in the dwelling. If the property is sold before the loan has been paid off or before the borrower has satisfied a minimum occupancy requirement, the government will want to recapture some of the payment assistance given and may call the loan due if the borrower is no longer residing in the property.
Better to stay away from Subject To deals where a goverment subsidized loan is involved.
I know virtually nothing about USDA financing. I know it has some strange twists and turns not found in other types of financing.
I recommend that you get some information from USDA or talk to a a broker knowledgeable in this type of financing. Many years ago, I read about a USDA financed home owner who upon resale, owed significantly more then his current outstanding balance. The details escape me.
What does the back end look like?
USDA are often subsidized loans that give payment assistance to the borrower. Payment assistance is granted on direct loans to reduce the installment to an "effective interest rate" as low as one percent, depending on adjusted family income.
Payment assistance is subject to recapture by the government when the customer no longer resides in the dwelling. If the property is sold before the loan has been paid off or before the borrower has satisfied a minimum occupancy requirement, the government will want to recapture some of the payment assistance given and may call the loan due if the borrower is no longer residing in the property.
Better to stay away from Subject To deals where a goverment subsidized loan is involved.
I know virtually nothing about USDA financing. I know it has some strange twists and turns not found in other types of financing.
I recommend that you get some information from USDA or talk to a a broker knowledgeable in this type of financing. Many years ago, I read about a USDA financed home owner who upon resale, owed significantly more then his current outstanding balance. The details escape me.
Remember, mortgages / Trust deeds are secured debt and would not be discharges. They may be foreclosed.
If it is that high and LTV you might even look at buying the 1st at a discount.