The Homeowners Assistance Program Benefit Could Be Taxable
Jun 11 2009
Late(r) Breaking News:
Friday, June 12, 2009
The OSD tax person advised today that they have a “fix” that will make HAP benefits in the PCS category non-taxable. The fix is under review by OMB; OSD hopes to attach the provision to a bill later this year. So for now, HAP benefits are taxable, but if the proposed measure passes Congress, the PCS HAP category could become tax exempt .
June 11, 2009
We just found out some of the financial assistance for members under the Homeowners Assistance Program is taxable for some applicant categories. The PCS category is one of the taxable categories and we are determining whether the other categories are affected.
This is a surprise to us as we believed the benefit to be excluded as income as was HAP program payments prior to this recent expansion of the program. See IRS Publication 3, page 4.
We are researching this issue and will report back as soon as we can get a source and a decision. In the meantime, if you apply for the HAP, ask about the tax status of your possible benefit. It could be that your $100,000 HAP payment could go down as income when you file your taxes for 2009.
While it is nice to see that the HAP benefit will be made even better for those that qualify, it is frustrating that this benefit, which Congress authorized to last till 2012, will run out of money December 2009. In my case, after my 4 year tour in DC, I guess I made the mistake of volunteering to go to Iraq for a year. As a result, I will not PCS till Summer of 2010. This decision, which was made before HAP was even a consideration, will likely be a $200K plus mistake. It would be greatly appreciated if MOAA would spend their efforts on addressing the shortfall of funding rather than making a sweet deal even better.
So much for thinking this might be an actual “benefit” for military. I’ve been debating whether I should PCS or just plain retire–seems I’m going to lose $$$$ no matter what I do!!
I second the call to push for further funding. I made the decision to take a PCS to Vandenberg based on the information available regarding the program. Now I’m facing carrying $120K of floating debt without the guarantee that I’ll be able to pay it back. The government is handing out billions of dollars to other programs, throw some of that money this way.
I hope this can get fixed for other folks. I received HAP payment in 1996 or so relating to a house I sold in CA. The lump sum was $24,000.00, and they took $5,000.00 in taxes out of this payment. Then the amount was counted as income for the year. If I recall corrected, we owed approximately an additional $5,000.00. So I received only about 40% of the payment.
After reviewing my earlier post, I see that my frustration resulted in me conveying a message I did not intend. Volunteering to serve in Iraq is not a mistake, rather I am frustrated that my choice will likely cost me severely in the pocketbook. The government does not owe me a bailout on a risk I took – I could have rented a house rather than buy – after all, in 2005, when I bought, there were many preachers of doom and gloom and an impending housing bubble. However, I do hope that Congress, with MOAAs support, will look at the way this program is being implemented and see whether it makes sense to provide further funding for this program.
Mr Ostrom,
Could you offer me some advise and/or point me to a resource that can help me?
My situation is not much different than anyone else’s — We came from Japan to St Louis for an AFIT assignment (no base within 50 miles of my university). We had a week to find a house-everything was inflated — we bought the house Aug 2007 and have been trying to sell it since Nov 08 when I was notified that I would be getting orders in January. We finally got an offer this weekend and should close on July 22nd (the realtor is afraid the house won’t appraise for what we settled for ) which is less than what we paid for it. We paid all of our closing costs (4400$) as the buyer and now we have to pay the same as the seller (a requirement by the buyer to “afford” the house. So, we have to take out a loan for 10,000 just to get out of our house to PCS (this is if the house even appraises for the settlement cost). I’m bitter b’c in 20 years we’ve never bought a house but had to for this civilian assignment. Is there any help out there at all for those that bought a house after July 06? I would really appreciate any help!
Tracy Edwards, Captain, USAF
When do we expect the final rules to be published and (hopefully) payments to begin for those in the PCS category? I keep checking the Homeowners Assistance Program website (http://hap.usace.army.mil/), but it keeps showing the same message:
“DoD policy guidance cannot be displayed until after the interim draft rule is published in the Federal Register. The dates for publishing in the Federal Register and initiating applicant processing are not known. They will be highlighted on this web site when the information becomes available.”
I submitted my package a couple of months ago and I am now waiting for the hopeful checks to be cut.
Also does anyone have an estimate or educated guess on what the percentage payout of the loss will be covered? I fall into the expanded category of PCSing and selling my home for a loss. BRAC was not a player.
The HAP website briefly posted the DoD supplementmental instructions, but was pulled and replaced with the message you posted. Basically the PCS benefit calculation was reduced to 90% of the home’s purchase price, plus closing costs. Additionally the option to sell the home to HAP was made more stringent – the home must be on the market for 120 days and be approved by a three star level DOD official, and the HAP reimbursement would be 75% of the orginal purchase price.
However, this could all change based on the register review. Meanwhile I’m closing in 2 weeks at a $65k loss not to include closing costs.
Let’s get this thing pushed through…and eliminate the tax penalty….
Keen -
Thanks for the response and info. When you say 90% of the home’s purchase price, plus closing costs, does that mean that if that rule holds I would be reimbursed 90% of the loss on the sale + closing costs? If so, that is good news. And you are right, let’s work to ensure this is not taxed. I mean it’s not income or capital gains.
Ryan
The calculation tends to be quite vague.
You’re right if it 90% of the loss on the sale + closing, then grand. That can be quite a save.
But there is a matrix pdf file I retrieved from the web that noted:
The greater of
90% PFMV – sale price + closing costs
or
Mortgage payoff – sale price + closing costs
Where the PFMV is the original purchase price.
HOWEVER, the same PDF file noted ELIGIBLITY criterior required that the home decrease in value equal to or greater than 10% to start. Thus a 300K home would have to drop to at least 270K. And if you sold for 260K would mean 10K plus closing. You still take the initial 30K in the shorts.
If you were able to sell at 275K then technically you did not lose 10% and not eligble at all. You would lose the 25K plus all the closing.
I’m not sure what’s right. I closed on my house today and will be filing. I’ll post what I learn.
From what I understand, once policy makes it to the Federal Registrar, it must sit there for 30 days before being officially approved. What I don’t understand, is whether or not there is a deadline for the interim draft rule to be published. Is this something that will be completed by the end of the fiscal year? Calendar year?
The website indicates that the home must be sold before 2012, which is fine, but I’m just wondering how much time we will be given to sell it. Currently, we have it on the market for sale and rent, and are having no luck either way… frustrating!
It is a very frustrating process as the HAP was expanded under the stimulus umbrella. It is dragging out so long (and we are not even close to the point where the checks will be mailed it), that one has to wonder if what if any affects this will have on the economy.
I just wish that the final rule set to include the timeline for the payouts could be published already.
I, too, am finding HAP to be very frustrating. We cannot afford to sell our house as we don’t have enough money to cover the loss and we are PCSing next week. We are making our house a rental but it is not financially sustainable to do that for an indefinite period. On top of that, we were told today that our insurance will be cancelled if we can’t find a tenant. I’m surprised that more people aren’t outraged about this. I am very grateful for this benefit, but concerned that it’s never going to happen.
I’m in the same boat as Duane. I was assigned to a 4 year tour in California and purchased before 1 July 06 but will not be PCS’ing until summer of 2010. I’m just hoping its possible to expedite my orders as soon as I know where I’m going. I agree that these benefits should not be taxed, but I just wish the program was designed to be commensurate with the USAF/DoD PCS cycle of 4 years…
I put in my application back in February when I first heard about the program and have been waiting for something ever since. In my area, we took a pretty hard hit on real estate. Value of my home alone dropped about $40K from the time I bought it back in ’05.
Assuming that I will qualify for the program (I’ve met all criteria put out thus far), I dropped the price of our house to the current market value, agreed to pay buyer closing costs and, of course, realtor fees. With that, we found a buyer. The sales contract states that the sale is pending approval by HAP authorities. In the mean time, she’s renting from us.
We’re still coming out of pocket about $400 a month in the mean time (difference between rent and our actual mortgage.) This process, like most government evolutions, is taking entirely too long. In the end, I’m sure it will work out for all involved, but this wait is nerve-racking. I’m at wits end here!
At the rate that this HAP is moving, I think we will be lucky to have a check in hand by Halloween. I mean they haven’t even published the final rule set yet. Now just imagine how deep the pile of applications is and how long it will take the HAP folks to go through them all.
To anyone that has completed the application, it was like the size of a small textbook once you had it all together. Now imagine the bureaucrats going through each and every page on each and every applications.
This has been so painfully slow, but at least we have something to be hopeful for.
Does anyone have any information about if they are looking to add more money to the program? Last I heard, there were over 1,700 applications in the Savannah District alone…I’m in the hole $120K and conservative math of $100K avg in the area adds up to $1.7B…that’s out of the original $555M from the stimulus package…MOAA help!
Does anyone have any information about if they are looking to add more money to the program? Last I heard, there were over 1,700 applications in the Savannah District alone…conservative math of $100K avg per application in the area adds up to $1.7B…that’s out of the original $555M from the stimulus package…MOAA help!
Here is the updated information that I have been able to find. I will keep an eye on it each week as new information is published. Maybe HAPLESS is going to turn soon to HELPING.
June 2 Complete proposed rule for the Homeowners Assistance Program (HAP) and submit to the federal rulemaking process.
June 9The Homeowners Assistance Program (HAP) Rule for the Federal Register is still being revised and is expected to be submitted to OMB by June 15. The HAP Circular used for execution is in final draft and should be completed on June 10.
June 16On June 12, the draft Interim Final Rule documents for the Homeowners Assistance Program (HAP) were sent to Washington Headquarters Service (WHS) and the DoD General Counsel for final internal DoD review.
June 23The Interim Final Rule for HAP is expected to be submitted to OMB soon.
June 30 On June 29, DoD Inspector General has scheduled an initial entrance conference with DoD officials for the Expanded HAP. This meeting will familiarize auditors with the parties responsible for Expanded HAP and support enhanced accountability
July 7The Expanded Homeowners Assistance Program has received over 3,100 applications with 98% being in the Permanent Change of Station category. The applications will begin to be processed after the Interim Final Rule is published in the Federal Register for public comment, which is expected in the next few weeks.
I was contacted by the Georgia office today for more information for our package that they received early March. Our package is #192 in their district. I read somewhere that they were expecting over 10,000 applications but to date have received less than 33% of that. Hopefully that means that there is enough money for everyone that qualifies out there. Here is hoping that things get moving soon.
Karen
I have been doing some more research on the Federal Register. I found the actual docket ID that pertains to HAP. It was published on June 16th and is now awaiting public comments to be submitted. Everyone is eligible to submit comments on the proposal and the law requires that the agency review each comment that it receives. After the comment period is ended (the end date for the HAP comments is August 18th) the agency can then publish a final form of the regulation. So far only one comment has been made about this document. It concerns how to determine qualifications for priority payment when it comes to those killed, wounded or injured in combat. So at least we know the next time frame is Aug 18th. Perhaps after that they will be able to publish their rules and regulations and get on with this. Take care and talk soon. Karen
here is the website where you can be notified when there is movement, comments or anything to do with the HAP bill or you want to leave a comment. Go to http://www.regulations.gov. Once there find search box and type in DOD-2009-OS-0089. It will take you to the page you want and then click on comment or submission. It will tell you how to leave a comment. You can also be notified when there is any movement on this bill or comments left. Just click on Notification and they will notify when something comes up. It makes me always feel better when I see something in writing. This way we can monitor what is going on. Talk soon. Karen
July 14
Publication of the Interim Final Rule for the Expanded Homeowners Assistance Program for public comment in the Federal Register is
expected in the next few weeks
I’m trying to get in the same boat as Shane above. My house has been listed since April, but only one person looked. I’ve already lowerd my price $40K. Put it up for rent at $500 less than what my monthly payments are. I only hope I can find someone to “rent to own” and close with them whenever my turn comes up to get paid. I only have 2 more weeks to find someone, or I’m paying the whole mortgage myself plus rent at my new duty station!
Oh and thanks Karen for all the info!
We are also in the same situation as you Scott. Our house in Alabama has been on the market for over 10 months now. We have dropped the price by $40,000 and still no takers. We will continue to drop the price $3,000 every two weeks in the hopes that someone will make an offer. We now are renting in the DC area and paying our Mortgage in Alabama. I am just furious that it is taking so long for the HAP program to get started. If we had been told ahead of time how long this process would take it would have been easier, I think, for those of us in this situation. It still could be another two to three months if once the interim rule is published they are going to wait for additional comments. I send stories that I find concerning this to our new President but I have never heard anything back. I have heard from my senator from Alabama but he just sent my complaints on to Washington. It is so frustrating to sit back and do nothing when I read about the foreclosures, bankruptcies and families being split up because of this situation. I believe that this will make military families in the future think twice before they buy again. What is that going to do for the economy of the areas that we are living in? Not a good situation all around. Talk soon, Karen
Does anyone know if you aren’t able to sell your home and you decide to rent it, will that make you ineligible for HAP? It seems to me I read something about it has to be your primary residence within last 6 months or something like that?
When people are faced with a descision to pay $40,000 up front so they can sell their house, it seems almost too easy to go into forclosure. Leave they keys on the counter, walk away, save $40k, take a hit on your credit. I guess the only thing stopping us is our morals and the will to do right.
After talking to the Savannah District office and DC HQ, renting will not disqualify you. You must have been living in the home when you received orders. Apparently, the govt option of buying is going to be yanked. Too much $ to maintain these homes they acquire, and it will eat up too much of the $555M.
We submitted paperwork back in May and have been told ALL ALONG by the Savannah District office to “put it on the market and call back when you have an offer”. So…..after putting our FL home on the market for a whopping 3 days (priced at just under 50% of the fair market value purchase price paid back in 2005) we have an offer! However, when I called the HAP District office (as I was told to do upon getting the offer), the man on the phone said “I’m sorry ma’am, but our hands are tied and we’re advising folks to do what’s best for themselves at this time”. Real nice. So now what?! I’ve got potential buyers but Uncle Sam is jeopardizing the sale! To say I am upset is an understatement!
We cannot afford to sell until the HAP program goes through. We got an offer on the house in April, but I think our share of the loss and closing costs is going to be more than we having in savings. Plus – if we have to pay taxes on the HAP benefit, we’re really in trouble. My husband has already PCS’d to Ft Campbell and daughter and I are behind. We’re paying mortgage and his rent. He wants us to take the house off the market and just make do for the next couple of years as he’s getting deployed in 2010. We’re in DC and hopefully the market will swing a bit up by then. Not sure I’m on board.
Our realtor got the following reply from the Savannah district July 13. Thought you might find this interesting:
*************************************
Ma’am,
Draft rules for the ARRA Expanded HAP, including policies and
implementation guidance, have been developed by the Rules Committee. The implementation guidance is required to be posted on the Federal Register for 30 days. After this, inputs and comments from that posting must be reviewed and, if approved by the OSD, included in the directive for the program. (I am not informed whether this updated version of the program particulars will have to be posted a second time on the Federal Register.) Only after this lengthy procedure of development will the finalized version of the directive be forwarded to DC for formal approval at the appropriate level.
The District is not privy to current OSD discussions on the program
details. Further, the District has not been provided any indication on a timeframe when the program directive is expected to be formally approved. No applications will enter the eligibility determination phase of processing until DOD and Army policies are disseminated, and Corps HQ notifies districts to proceed with eligibility determination and benefit computation.
As we review application packages we are identifying lacking
documents that we know will be required to evaluate eligibility or compute benefits for applicants. When a pertinent document is discovered lacking, we are contacting applications to provide them an opportunity to submit the document(s) now so as not to delay the progress of their application later during the more critical phase of processing. Your client’s application will be reviewed in turn; and if necessary, (s)he will be contacted either via email or posted letter regarding any documents still required to complete his/her application package.
We have also begun entering applications into the official automated HAP tracking program (HAPMIS). We have staffed up to complete this phase of processing so as to gain a head start when we are released to begin the evaluation for eligibility and computation of benefits.
I can certainly appreciate the position the delay in the application
of the ARRA Expanded HAP has placed your client in. Please know that the District is doing all we can to prepare for the long anticipated program directive and the release to begin determining eligibility and computing benefits for program applicants. Unfortunately, there is no available update information on the program directive I can provide at this time.
Due to the delay in the program directive being formally approved and the monumental backlog of applications received in the District to date, I might suggest you do not rely upon your client’s application being reviewed to evaluate eligibility and compute benefits in sufficient time for benefits to be paid at a Closing scheduled within the next two to three months. I recommend that your client take whatever action relevant to the residence in
question that proves best for him/her and his/her circumstances.
Unfortunately, the District is not staffed to provide individual
updates of the program status to applicants, even if there was some information the District were privy to. New releases of information for the ARRA Expanded HAP (i.e., progress of the program directive toward formal approval, districts released to begin evaluating eligibility and computing benefits for applicants, etc.) will be published on the official HAP website located at http://hap.usace.army.mil I encourage you to periodically
monitor this site for updates. Further, due to the volume of telephone call and email queries about the program itself being received daily, individual requests for application status updates have a low priority for a response as there has been no progress change; and will not be until the program directive has been formally approved.
I recieved the same e-mail from the HAP folks. What would really make me feel more comfortable is some sense that they will take care of all the folks that made career decisions based on the availability of the program…
Even though I am not a MOAA member, I sure would appreciate them stepping in and giving us a hand in Washington…I would gladly join if I knew that the organization was working on this issue.
Thanks to all that have provided helpful information to the rest of us.
Sitting in Japan (non-vol PCS) since January. House was marketed for over a year with numerous drops (even offered it to the real estate broker at $65K under FMV at a cost to me of $12K out of my pocket to walk away with my credit still intact) No luck and down $12K anyways in mortgage payments on a vacant home! Funny….I took the assignment instead of retirement to bathe in the glory of a promotion to SMSgt ($500 a month give or take a few). Do the math………hmmmmmmmm feels like TSgt pay. Hang in there peeps and have a HAPpy day.
HAP has updated their website with the paragraph below:
The Department of Defense and Office of Management and Budget guidance for the ARRA expansion of HAP is being finalized and will soon be published in the Federal Register. When rule making is finalized, the guidance will be displayed on this web site and the Corps of Engineers will be authorized to process expanded program applications.
Of course I would like to know what their definition of “soon” is. Lets keep our fingers crossed that the date in August is the final one that we have to deal with.
Karen
…and let’s hope there is enough money…maybe we could steal some from the cash to clunkers program…
Amazing, isn’t it? Banks needed a bailout and received it in no time. Ditto for the Big Three. Cash for Clunkers is spitting out money before I even heard the program existed.
But you’ve got countless members of the Armed Services who need a helping hand in these tough economic times but find themselves being told to standby month after month after month due to the typical government bureaucracy that we’ve found ourselves up against our entire careers.
I’d like to say the whole process has left me hesitant to ever again purchase a home while I’m serving on active duty. But alas, I can’t resist. We just got a hell of a deal on a new construction house at my new duty station here in Jacksonville, Florida. It almost makes up for the beating I’m taking on the other house back in Maryland.
I just hope that this thing gets pushed through sooner rather than later or our potential Maryland buyer may get tired of waiting and look elsewhere. I’d be up Poo Creek without a paddle.
Assigned in D.C. Bought in April of 2006 for $515k. Homes on our street and subdivision of equal size/quality are selling for $315k. That puts me -$200k right now.
I can either PCS in August of 2010 or retire….and maybe move somewhere?
Either way, it looks like I lose out on this money. Am I wrong?
I could get my retirement orders cut today if it would help (1 year out)? But…it would be a “voluntary retirement”.
I’m also looking to pin-on Major in December. I wonder what happens if I purposely turn it down? Maybe I could get a forced retirement?
Anyone got any advice?
BTW….I’m also going through a divorce right now. My wife was earning $70k….now that’s gone.
Sully
HAP is for PCS help not retirement. So retirement is sure to get you nothing; PCS maintains a chance for some help as long as you PCS before Sep 2012. Not sure I follow the rest of your thoughts…how retirement helps, vol or not.
You say HAP is for PCS not retirement…but retirement orders have in them direction to PCS to home. Where does it say that retirement is not covered by HAP?
Just curious and interested.
-Rupe
As mentioned in other comments and as stated by the Army Corps of Engineers, HAP benefits are currently expected to be taxable. I am not sure if others are aware but the “Cash for Clunkers” program is not taxable (US Dept of Transportation: http://www.cars.gov). Furthermore, President Bush signed legislation in 2008 that makes the forgiven money associated with a “Short Sale” non-taxable. That said, I ask that everyone contact his or her representatives and voice their displeasure in this oversight and complete disregard for the service member. None of us are asking for a hand out as was given to the banks, auto industry and many others. What we are asking for is equality. Why should we pay taxes on money that we lost. If it were investment income, I could claim the loss on taxes but because it was our primary residence, there is no loss and HAP benefits are taxable. In essence, we are paying double taxes. I know there will be many to not agree with me and respond back that I should be thankful for qualifying for HAP benefits and I am thankful. What I do not want is to be kicked in the shin again because I as well as many others did the right thing by fulfilling our obligations.
According to the Secretary of Defense’s office the delay right now in getting HAP applications started is with the IRS and Dept of Treasury. They are debating whether the funds we receive will be taxable or exempt and if money will be held at closing if so. Once that is decided, and they hope that it will be in the next few weeks (August 18th is the deadline for the comments in the Registry) they will be able to publish the rules. Once the rules are published they are hoping that it will be treated as an emergy situation and then claims will start to be processed within two weeks of that time frame. Remember that wounded soldiers and widows will be processed first (only about 2% of all claims fall in this category) and then they will start on ours. Depending on what number you are in the district (when your application was first received) is how they will be processed. People are already being contacted to supply any missing information in the application packets. Hopefully this means that by first of October or so we will see some payments being made. Keep all your digits crossed.
Karen
Another $2B for clunkers……another 2 months for us!
It is amazing how the banks get their money immediately….. poof; but it is complicated for us!! I don’t get it! I applied for HAP to purchase my home after PCS, but thankfully sold it in March, but lost $52,000. I have no idea if I will get benefits, and if so how much. I meet all the eligibility credibility listed in the bill and on the website, but you never know????
Well, the 30 days of sitting in the Federal Register has come and gone. Anyone heard anything?
Shane I have talk to the contact on the Federal Register and she has said that as of last week their were 3 isuues being worked. Including wether this will be taxed. She explained that when this program was re funded in febuary from the stimulous package, the white house was unaware the entire bill needed to be re written. (703)602-4353 is the number, this seems to be more useful than calling the hap office. This is where its all happening.
I spoke with the main main office again this morning and they “say” they are very close to a resolution with the irs and are planning on making payments on claims by the end of september. They have to post the changes on regulations.gov for 30 days, but will start to process claims before the 30 days is up and if any changes are made they will then impliment them. Another month, lets all hope this is the end of the waiting game.
Nicole,
Thanks for the gouge. Sure would be nice if they actually stuck to the date this time around. I won’t hold my breath.
I recevied a notification in the mail some time back stating that my application was in the review process. A number was provided (not the standard HAP number) so that I could call a claims processor that I’m assigned to with any questions. I’ve called no less than a couple of dozen times over the course of the past few weeks, leaving several messages in the process. Today was the first call back received.
Unfortunately for me, I wasn’t available to answer the phone. If it’s this hard to get a hold of these guys before the claims are even being processed, I can only imagine what communication is going to be like once the ball gets rollin.
Shane,
Well they say they are reviewing all applications that are comming and and getting them ready to be processed out as soon as they get the ok. So lets hope that within a week or to from the ok, you get your approval letter, along with everone else!
Shane, it has been my experience with the HAP personnel that it is easier to get hold of them through Email. If you happen to be the Savanah district leave me a message here and I will give you contact information here on this site. Our package is #192 in that district and we have been contacted already to supply additional information. So if I can be of help just ask me. I check this on a daily basis when I am not in Dip training. Karen
I spoke to Sarah in DC yesterday and she said tax issue is still the main hurdle. Hold up is mostly because there are so many other parameters added to the stimulus bill that they can’t just process the way they did for BRAC. Big bummer as Army Corps could have had half these claims paid by now!
Yes, the hope is still to get the rules published asap (between now and mid-Sept) and begin paying out immediately (as “emergency” approval) and adjust if needed as things change based on publishing in Federal Register.
So far I read that:
Karen submitted her package in March and heard back (when?) and is #192.
Shane submitted his package in Feb, heard back (when?) and is what # ?
Any one else? Also, if I do a Short Sale to get rid of this house, will HAP still pay me for the loss? I know they won’t if it’s a foreclosure. Still making 2 mortgage payments here with no renter in the old house. Hang in there!
I filed with Sacramento in March, and my acknowledgement letter states I will not get a case number until policy guidance is received. The folks at the HAP office there said my case was a “slam dunk,” since I had already sold at a loss. Then the initial guidance was published stating your house had to cost less than 417K (I paid 505K). I’m not sure what costs were on the east coast, but in 2005, 417K was a 1700-1850 sq. ft. starter home in the Phoenix/Tucson area. Right now, I have no idea if I will see a dime from a 70K loss.
Okay, I was off on my date. I sent in my package around the middle of March. I was assigned application #249. I’d say it was about 6 weeks ago when I received a letter requesting additional info. I can’t give you an exact date at the moment (away from home TAD).
Karen, what is the word on the tax issue? Are we looking at benefits being tax-free or are they just trying to get taxes pushed back to regular tax season (not having to pay upfront)? I’ve heard both and don’t know what to believe. Goes without saying that I’m rooting for tax-free.
Shane they are wanting to make it tax exempt. That is the hold up here.
Any word on if they are going to have enough money to cover everyone?
I just want to know if the cutoff is still July 1 2006 for your home purchase or have they moved it out a bit to reflect reality. Here in Jacksonville, the market didn’t nose dive until 2007.
PCSed from Nellis.. Bought in 2005. Owe 270k, 6% 30 yr VA loan. Just got offer of 90k & 105k. Rent loss 750/month. Whats best/worst case scenario? Was told by Sacramento office that applications continue to pile up & processing will take over 6 months. Still not sure if 90% of prior FMV or what will be covered, never mind the tax implication if any.
We sent our HAP package to Savannah. How do find out what application number it has?
Patty you can call them (if they answer) or you can email them at the address on their website. Did you just send it? If so you will have a very high number as it has been six months since they started giving out case numbers. Our was sent a the end of February and our number for Savannah is 192. Hope this helps. Karen
For those of you who sold at a loss, how did you come up with the money at closing? Personal loans, credit card, or was the sale amount enough to cover what was left on the mortgage?
If I do a short sale, I probably won’t get anything from HAP, but I can get out and move on with my life.
If I get a loan to cover what’s left, and HAP doesn’t go through for me, I’m stuck with huge debt with bankrupcy as my only option since I can’t short sale anymore. Some reassurance would be nice
Scott…we applied for HAP and have almost completed a short sale since HAP has taken so long. I’m not sure what happens when your PCS move resulted in a short sale to avoid forclosure. I would hope that HAP would pay the difference to the lender so that we can avoid the hit on our credit record. Have you researched HAP’s stance on shortsales?
Scott,
I would come up with a lease to buy with the stipulation that the sale is incumbent that HAP goes through for you. Thats what i am doing. Rent wont cover the mortgage, but the loss is tax deductible, and at least someone pays your utilities. The processing of applications may take several months anyway. I heard they will do wounded warrrors & surviving spouses first(very few of these relatively) & then prioritize based on RNLTD.
I understand that there may be a qualification restriction based on the date of PCS Orders. Can anyone verify that the date is 31 Dec 09, and is this the RNLTD or the date that the orders are issued?
Buffdriver – The “purchase by” date is set by law and will take an act of congress to change. The “sell by” date and maybe the “PCS by” date are up to the discretion of the government personnel deciding the rules behind closed doors. Right now it is anyone’s guess what the rules will be. Interesting how the summer PCS season has come and gone with no resolution.
FYI to all…I just spoke with the HAP office in Sacramento and they informed me that if you sell your home before being determined eligible for HAP you sell it at your own risk.
EH,
HAP is vague on any details since they can’t make up their minds. They say HAP will protect you from any “enforceable liabilities” from foreclosure. I assume that means a defficiency judgement if the bank comes after you. I hired an attorney to ensure the bank doesn’t try for a defficiency judgement (since it’s legal in Illinois). I think that if the bank forgives my debt, I claim it on my taxes and am exempt from paying (Mortgage Debt Relief Forgiveness Act), and I will just take a hit on the credit. HAP will have nothing to do with it and credit will reflect regardless. Are you current on your payments, EH? If so, how did you get the bank to approve a short sale?
Jon,
Rent to own sound great to me, but as a renter, I would be nervous that my home is in danger of foreclosure if the owner is in a bind. Too many unknowns turn off most people. How did you convince someone to agree to that? Does their rent contribute to the final sale price? This $8000 tax break for first time home buyers has turned off all buyers from my home since it will take too long to close. For me it’s a race to see what program I go with, short sale or HAP. Whichever gets approved first because I can no longer keep up with payments
There is talk now that they will extend the $8000 tax credit (passed the original date of 12/09) for first time home buyers and that it may increase the l amount to $12,000.
There is talk now that they will extend the $8000 tax credit (passed the original date of 12/09) for first time home buyers and that it may increase the amount to $12,000.
Scott,
I worked with a realtor who has worked with HAP before & he said that was my best option. They make an offer on the home.. The contract has a stipulation that the deal is contigent on HAP approval. The rent does not go towards price of home, they are basically tenants until gov’t comes up with your closing costs & you can sell. In the meantime, they are able to move right in unlike the short sale and foreclosure market, that’s where the benefit is.. People want to move right in, yet very few are selling in these “ground zero” markets, e.g., Vegas, Phoenix, etc, aside from short sales/foreclosures which can take months to negotiate.. Now if you as the landlord in danger of being foreclosed on, thats up to them how forthright you wanna be with that. I know some people in these markets who are renting out and not paying the mortgage because in Vegas its taking over 12 months of missing payments before these people are being forced out.. It’s a blood bath and people are doing what they can.. As far as the 8k tax credit, thats probably only about 50% of people looking for a home… The deal they can get on a HAP home is probably better than that anyway. Foreclosure prices yet move in today.. Good luck.
Looks like the powers that be (Treasury Dept/IRS) have decided they need a “legislative fix” for the tax issues caused by ARRA rules to be resolved with HAP. OSD says the “Ways and Means Committee” is supposed to be working on it. Projected date now the end of September- but I would find this surprising if we actually need a draft/final proposal and both Houses of Congress to approve. I must again suggest you contact your Congressman/woman!
Sorry it is not better news.
Talk to you soon.
Karen,
I’ve contacted my Congressman. In fact, I’ve contacted three of them. One from my home state, one from Maryland where my house is located and one for Florida where I’m currently stationed. Not one has responded to me. Not one. Nice, huh?
I have contacted mine, as well. No response either. Incredibly frustrating at the amount of time this is taking to implement.
Karen – Thank you for your updates.
Maybe it would be helpful to find out who is on the “Ways and Means Committee” and we can email them? Just a thought.
We gave up on HAP and tried to short sale. After 2 months of getting a buyer and submitting a short sale package to USAA, they denied us. According to USAA, Fannie Mae has a new regulation that they will not even consider looking at a short sale package until you a delinquent on your payments. So, I guess we are being punished for trying to be responsible. Husband is leaving next week on PCS orders. I guess we will just live apart for 2 years.
Wikipedia has the following people as being on the Ways and Means committee:
Charles B. Rangel, Chairman, New York
Pete Stark, California
Sander M. Levin, Michigan
Jim McDermott, Washington
John Lewis, Georgia
Richard E. Neal, Massachusetts
John S. Tanner, Tennessee
Xavier Becerra, California
Lloyd Doggett, Texas
Earl Pomeroy, North Dakota
Mike Thompson, California
John B. Larson, Connecticut
Earl Blumenauer, Oregon
Ron Kind, Wisconsin
Bill Pascrell, New Jersey
Shelley Berkley, Nevada
Joseph Crowley, New York
Chris Van Hollen, Maryland
Kendrick Meek, Florida
Allyson Y. Schwartz, Pennsylvania
Artur Davis, Alabama
Danny Davis, Illinois
Bob Etheridge, North Carolina
Linda Sánchez, California
Brian Higgins, New York
John Yarmuth, Kentucky
Dave Camp, Ranking Member, Michigan
Wally Herger, California
Sam Johnson, Texas
Kevin Brady, Texas
Paul Ryan, Wisconsin
Eric Cantor, Virginia
John Linder, Georgia
Devin Nunes, California
Pat Tiberi, Ohio
Ginny Brown-Waite, Florida
Geoff Davis, Kentucky
Dave Reichert, Washington
Charles W. Boustany, Jr., Louisiana
Dean Heller, Nevada
Peter Roskam, Illinois
Scott/Stacy: I had to become delinquent on my payments as we PCS’d and could not afford to take an 800/mo loss if we rented the home (yes you read that right..if we rented the home at current market rate we would still be paying $800). So short sale is where I’m at with USAA. Though I have always been very very happy with USAA’s services, their policies pertaining to mortgages are ridiculous. I knew I was PCS-ing four months before we actually left, at which time I immediately informed USAA and asked for a mortage negotiation. They wouldn’t even talk with me until we were 90 days delinquent. Now it has cost them more money to work with me than if they would have just worked with me when I initially talked with them. I would be suprised if HAP helped anybody at this point since there is a deadline of December 2009 to sell your home.
EH: USAA won’t even consider looking at our short sale package. All they tell us that it was Fannie Mae’s policy not theirs. My husband spent an hour talking with a Fannie Mae representative yesterday who told us that it was not Fannie Mae’s policy for you to be behind on payments to negotiate a short sale. USAA is flat out lying to us and refusing to help. We are currently in Florida and will stand to lose $1000 a month if we rented. We are shocked and sadden by the USAA’s refusal to help us. We have a buyer willing to pay the high end of FMV and USAA won’t even consider opening our short sale file until we are late on payments. By then we will have lost our buyer. SO FRUSTRATING!!!
Patty-
Thanks for listing the committee members.
EH,
According to the rules originally published (who knows what will happen when they finally are published) you DO NOT have to sell your house by 12/31/2009. For PCS claims to be eligible, the home sale must result from PCS ORDERS issued on or before December 31, 2009, and the application must be received by March 31, 2010. This does not mean that you must sell your house by this date. I hope that this clears things up.
If anyone is interested in more information, I am a moderator on moresam.net, a military realtor website where we talk about the crisis going on with military families affected by the HAPless situation. I try to leave any information that I have learned at both sites though.
We have had six families interested in our home in the past four months but because of the HAPless situation, none are willing to wait for HAP to come aboard. Now we are facing the dilema of the $8,000 home buyers credit deadline fast approaching also. The good thing is ?????? that program is suppose to be extended into 2010 and with a higher credit amount too.
I hope that soon this will be but a bad memory for us all. Take care and talk soon.
Karen
I have contacted the Chairperson of the Ways and Means committee. I have explained our situation and asked him to look into the issues we are dealing with. I don’t know if this will help or not but we have to keep trying.
We had another offer on our home in Alabama but they are not willing to wait until we hear about the status of HAP. So another one bites the dust. Chins up people. It has to end soon. Karen
I spent a decade in the military. Not once did anyone force me to buy a house. I knew the risks, and spent most of my time renting. It’s not rocket science to know that you PCS every 3 years or so. Now when people get caught with there pants down they want a handout at the cost of the tax payers. Perhaps renting will be a better option for your next duty station. If you’ve spent any time as an active duty soldier/airmen/sailor/marine you should know that homesteading and profiting off your BAH is not in the cards.
Stacy, I feel your pain and I’m so sorry. It is such a bummer that we all have to ruin our credit so we can honor our commitment to serve in the armed forces! At least we have our health, family and friends. I’ve given up the idea of a good credit report for some time as a result of the current situation. If and when HAP comes through it can’t resolve our current delinquencies and that will follow us for some time. HAP’s delay really caused military families some severe hardships.
Army Vet- thank you for your dedicated service. I don’t want a hand out. I want help. We were not looking to profit when we came out here, we were looking to at least break even. Now we are trying to do this the right way. We could walk away and cause the taxes payers even more. With each family that moves out of our development foreclosing on thier homes the value of everyones diminishes. For the first time there is help from the military. Who in their right mind would not reach out to take it? As a vet, you should be proud that DOD is doing this.
Karen,
Thanks for posting so much information on the HAP debacle; you’re about the only source for information on its status. I took your advice and wrote letters to my congressman (Danny Davis, Illinois and Peter Roskam, Illinois). Also, have connections with Dick Durbin and Tammy Duckworth so I wrote them as well. Not sure if this will do any good but it can’t hurt. Thanks again!
So will they release the guidance soon without a breakthrough on the taxes? Also, is there a new guestimate on when a bill will be introduced to resolve the tax issue? I’m also interrested on what the Chairperson of the Ways and Means committee said to Karen or if he responded. Is there a good way to contact him that can be shared?
My husband has been in the military for 22 years. We have our house in La. that we have tried to sell for the last 1.5 years to no avail. Finally we have it rented, but we still have to kick in $900 monthly to cover mortgage payment.
We PCS’d and rent..having two house payments really hurts. Doesn’t look too promising for HAP relief. What nobody has said is
what happens to soldiers security clearances amid all this!
HAP is fine if it ever comes thru…meanwhile credit reports, families and security clearances take a tumble. Alot of soldiers and civilian government workers are losing jobs and promotions due to this.
Army Vet,
Not sure what positive contribution your post makes to this thread. Our decision to buy was based on where we were moving, the cost of renting vs. buying, and what was best for our situation. Our family has served for nearly 20 years and we have NEVER profited from our BAH. Perhaps your advice on how we should all just rent at our next duty station would be better suited for another forum. We are here to try to support one another, and clearly you have other motives based on your snide comments.
We sold our house for $120K under what we owed. We have negotitated an 0% interest payback on one part of our loan and an interest only loan for the other part…we are still pursuing the HAP payback. I don’t think that if you sell your house, short or otherwise, that precludes you from getting re-imbursed, it will just take awhile. We tried to go the “private sale augmentation” route, but that was impossible. I was contacted last week to provide more information, so there seems to be some movement…
Man oh man. Do I have to bite my tongue-real hard right now. But being the Diplomat in-training that I am (a volunteer position for me as this is my spouse’s job) I will hold my temper and my tongue.
Army Vet this is a public forum so you have every right to be here and to voice your opinions. Not exactly sure what you hope to accomplish with your comments but this is America and you do have the freedom of speech. With that said, I suggest that those of us seeking information and ways to reach out to others with the same goals, that we ignore and do not respond to Vet. We also have the same rights and I choose not to respond to someone that is obviously looking for a fight. It is not going to happen Vet so go find some else to pick on.
Ryn as you guessed, I have not heard back from the Chairman of the Ways and Means committee. His name is Charles B Rangel
Committee on Ways & Means
U.S. House of Representatives
1102 Longworth House Office Building
Washington D.C. 20515
Phone: (202) 225-3625
Fax: (202) 225-2610
You can also go to the website http://www.waysandmeans.house.gov and fill out a contact form.
Cole, do I truly believe that by writting to our congress people, news stations, prominent people, that it will have an effect? Yes I do. I feel that if more and more people would take an interest and let those in control know what is going on, how it is affecting our families and jobs, then something will have to be done. Call me naive (as my husband does time and time again) but I truly believe that we must tell our stories.
Again, I will post when I hear or learn something new.
karen
Regarding the Security Clearances. I was actually an adjudicator for some time. What any of you who have clearances should do is tell your base/post/station security office of your situation in writing. Always be forthcoming with ANY information pertaining to your delinquent debt or mortgage situation. This way it proves that you would not be under distress if you were threatened by anyone who knew about your situation. Please don’t take my word as GOLD, but it should help you!
I have two houses that might have qualified under HAP if the DOD actually gave a hoot about active-duty military members. I bought my “retirement house” in Tucson and got orders 10 months later–of course, I bought when the market was hot in ’05. Moved to VA and bought my next “retirement house”. At the time, the market was so hot in AZ that I figured my house out there would sell quickly and there were no good rental homes in VA (fallout from hurricane Isabel). Less than three years later, I got orders again. So, I’m at my third base in three years.
Forty months after I left AZ, the house is still vacant and unsold. Although I reduced the price by 40%, I can’t get rid of it. My VA house is rented for $1200 month less than my mortgage. Savings gone. Credit maxed out. Thanks, Secretary Gates.
I finally got an offer on the AZ house today. If I can find a $70,000 loan to close the sale, I wonder if the HAP will ever pay me back some of the $285,000 I will have lost on that house.
I want to wash my hands clean of the whole thing! I am fortunate to not be the seller, but am unfortunate to be the buyer! I enter a contract to buy a home waiting for help from HAP and this has been the worst mistake I have ever made. I have been in contact for 4 months, I just want to move into my new home and it seems asthough it will never happen! And now if I try to walk, ill loose my $5,ooo deposite. I was mislead by the HAP offices when I did my research before we went into contract. They keep saying the end of this months, 4 months have gone by!!!! I have contacted Shelly Berkley, Nevada’s congress women and the News. no one cares!!!! Now if it does indeed happen at the end of this month and we close in October, I have to move and deal with my 10 month olds Kidney opperation….. Geeze!
Nicole can you rent from these people while you wait for HAP to come to the settlement table? I guess most of us never looked at the other side, as to what you are going through as the buyer, and dealing with waiting for HAPless to happen. I hope that this issue is resolved for all of our sakes soon. Take care and talk soon. Karen
Karen,
We dont want to take that risk since a loan is never guaranted untill escrow closes and the possibility they don’t get approved or have their end of the money at close. This has just been a horrible experience for all parties involed and I will never do anything like this again. We are in Nevada so I called the Sacramento office today for an updated and they are clueless. They don’t have the file marked to proity or how they will process the claims once they get the heads up to move on. All they could say id they have 1200 cases at their office. And the the number that is on the document on the federal register is who I normally call said monday that they hope withing a month from now. Its just keeps getting pushed off and makes me wonder how hard they are really working to get this done. Shinnanigens!
In all seriousness, what is MOAA doing about this? I see work on other topics, but nothing but this internal discussion on HAP…this is more than an inconvenience, it can destroy lives and careers and MOAA seems to be our only “voice”
http://www.airforcetimes.com/news/2009/09/military_homeowners_tax_091709w/
Bill to help homeowners moves forward
By Rick Maze – Staff writer
Posted : Thursday Sep 17, 2009 13:09:53 EDT
The House Ways and Means Committee unveiled a bipartisan military homeownership tax bill Thursday with provisions aimed at helping people buy or sell a home in a down market.
Committee aides said the bill, a collection of several tax-related initiatives for service members and their families, is on a fast track for consideration by the House of Representatives. It could pass the House in two weeks, aides said.
Among the key provisions of the Servicemembers Home Ownership Act of 2009:
* Homeowners Assistance Program payments from the Defense Department, for certain service members forced to sell a home at depressed prices, would be exempt from taxes. The tax status of the payments are one major reason why the Defense Department has not yet made any payments of a benefit that is expected to cover about 10,000 people who bought a home before July 1, 2006, and who are either wounded service members or who are permanently reassigned to a new duty station. About 4,000 people have applied for the help, even though the Pentagon has yet to publish rules for how payments will be made.
* Service members and some federal workers who received an $8,000 first-time homebuyer tax credit for the purchase of a home before Dec. 1, 2009, would not have to repay the credit if they sell the home after less than three years or stop using it as their primary residence. Military personnel, Foreign Service officers and members of the intelligence community who are forced to sell their homes because of government orders would be exempt from repayment.
* The $8,000 tax credit would be extended beyond Dec. 1 for service members, Foreign Service officers and members of the intelligence community who have been deployed outside the U.S. for 90 days or longer between Jan. 1 of this year and the Dec. 1, 2009, expiration date. The extension is recognition that they may have been unable to purchase a home because of government service. Income limits still would apply, phasing out the credit for single taxpayers with adjusted gross income of $75,000 or more and couples filing joint returns with adjusted gross income of $150,000 or more.
Ways and Means Committee chairman Rep. Charles Rangel, D-N.Y., chief sponsor of the bill, said in a statement that the measure is intended to ensure that service members are “able to take full advantage of the programs we enact.”
“This bill will improve how certain provisions under the Recovery Act apply to America’s service members, and I hope it will see swift passage in the House and Senate so it can get to the president’s desk as soon as possible,” Rangel said.
Shannon you beat me to the punch. Rep Rangel had sent me this article yesterday in reply to my email to him but I was in the hospital all day long with my husband. I pray that this is truly good news for us and that the long wait is over with. Talk soon.
Karen
The end of the artical doesn’t make sence about getting “passage in the house and Senate and to the prsidents desk”, the bill has already been signed. They are just making the appropriate provisions to make it tax exempt. I don’t know, that sounds sketchy to me with all the reserch I have put into the program….. I just hope it is ready in 2 weeks!!!
The bill was signed but now the revisions to the original bill must go to committee, then to House and Senate and then to the President again.
Although it’s nice that they’re seeking to make the benefits non-taxable, have they done anything to fix the horrible implementation guidance so that active duty military members might actually receive some benefits? Specifically:
1) Did they remove the absurd cap on purchase price? FNMA/FHLMC loan limits have NOTHING to do with home prices. Why should people who bought more expensive homes with big down payments be penalized rather than the “Nothing Down” crowd? I bought two houses during this mortgage crisis and put 20% down on each. Who was more responsible, the guy who bought the $417K home with nothing down and a teaser rate loan or the guy who bought the $521K house with $104K down and a loan that met FNMA/FHLMC guidelines? If they are going to restrict eligibility based on dollar amounts, it should be based on loan amount or maximum total benefit amount.
2) Did they restore the guarantee ratios for ALL potential HAP beneficiaries? I saw nothing in the ARRA that gave special privileges to to Wounded Warriors & Surviving Spouses. Why discriminate against active duty military members who were ORDERED to move? The law authorizes 95%, why would the SecDef discriminate against people who are still out on the field of combat?
3) Did they adjust the policy to ensure that “prior fair market value” would be used as the basis for calculations rather than original purchase price (as in the original BRAC HAP program)? What about people who bought homes at low prices and put lots of improvements into them? The old BRAC HAP covered improvements–this version doesn’t. How about all those who bought houses that appreciated in value before they were forced to move? The government should use the fair market value AT THE TIME ORDERS WERE ISSUED–this is neither difficult, nor expensive, to determine.
4) Will the government be buying homes and paying off mortgages? I’ve heard that this version of HAP will not buy homes. If that’s the case, I have to ask: If I COULD have sold my home, don’t you think I WOULD have? In fact, I got an offer on my AZ home last week. Had it not been for the fact that I have already drained my life savings keeping my credit intact while the house sat vacant the last threee years, I would have thrown another $80K at the house to make it go away. If the administration weren’t busy worrying about tax treatment and other bureaucratic idiocy, they could have met me at closing for a sale augmentation (as authorized by the ARRA legislation).
I apologize for complaining, but I’m frustrated that the Secretary of Defense has been so slow to implement this program. I know the ARRA legislation wasn’t well written, but there’s no excuse for leaving all of us hanging while they sort out the administrative details. I won’t care about tax issues until April 15th 2010. I need to get out of my house now! Even if I sold my house at today’s asking price, I will have lost about $285K and that number goes up by almost $4K per month. I can’t wait for bureaucrats to dot the i’s and cross the t’s.
I got an email on June 22nd saying they received my application. I just got a letter in the mail requesting more documents. Not clear on what number I am, but I’m guessing #1879 based on the application number.
That and a lady called me possibly wanting to rent-to-own the property! Just when I was about to give up. Here’s to getting my hopes up!
Just in case somebody in a position of power is reading this blog, please allow me to offer a few thoughts on how to fix the military foreclosure nightmare…
1) Authorize dual BAH from the time a member departs his duty station until the day the home he was ordered to leave sells or rents. This way, the government shares the financial risk when it moves military members.
2) Make TSP, IRA, and 401K “hardship withdrawals” tax free (or at least penalty free) when utilized in response to a PCS. If I can use IRA money as a first-time homebuyer without penalty, why can’t I use it to avoid foreclosure when the military orders me to move?
3) Make losses on the sale of a home due to a military move tax deductible. When the military moves us, it does so under PCS ORDERS. We are REQUIRED to move as a term of our continued employment. We could literally be sent to prison for failing to comply with the order. That’s at least as valid a business expense as season tickets to the Lakers or steaks at Morton’s.
All of these provisions should be retroactive to 1 July 2006, the ARRA-recognized start of the “mortgage crisis”. These provisions would pay for themselves because you can bet that the number and frequency of expensive PCS moves would drop drastically.
Vinny brings up some great and logical points. The original guidance reminds me of Psychology 101 and the fallacy of “groupthink.” Put a bunch of bureaucrats in a closed room and it’s unbelievable the flawed decisions that can be produced.
Besides the inane concept of using current FNMA guidelines for housing purchases made years ago, my favorite act of stupidity is requiring that your loss exceed 10% (that’s 16% with closing costs) and prove that average housing losses exceeded 10% in the COUNTY you lived in. Nevermind that military zip codes have often suffered more than the county at large.
My guess is these geniuses got an earful from high ranking personnel in the Washington DC area, where modest townhomes were selling for 800-1200K just 3-4 years ago. I am hoping that the final guidance will make much more sense and be a real help to our military personnel.
Charles makes an excellent point about the loss exceeding 10%. I guarantee you losing a year’s salary or more on a home sale is sizable regardless of the percentage!
Vinny-there was a section on the HAP application to list any major improvements you have done to the house. The HAP office I spoke to said that would be taken into account as well.
As far as your statement “The government should use the fair market value AT THE TIME ORDERS WERE ISSUED–this is neither difficult, nor expensive, to determine”, I disagree. This program is here to help out the people that bought their property before July 1, 2006 and have taken a great loss. If we were to change the program in the manner you have stated above most of us would not meet the 10% requirement. By that time our property had already taken 90% off the loss. I should mention our property is down 146K.
All,
an update on when to expect some results as far as the new tax provision. I was a DoD legislative fellow on capitol hill recently, and was able to see how stuff like this works its way thru the process.
HR 3590 was introduced in the House Ways and means Committee (Sept 17th) with the intent of passing it thru quickly. This is a good thing, but the process of getting through to being signed into law may take some time. But there is a deadline they are running up against which may provide some urgency to the passage. I don’t want to give a school house rock summary of how the legislative process works, but just want to share my best guess on “when” it will be finished.
First, the bill is sponsored by the Committee CHairman, which basically guarantee’s it will get though the committee and to the House floor for a vote. Also, it is a bill which supports military families and is deficit neutral, meaning it doesn’t add to the budget. Most likely, this bill will pass the House without any issue.
After that, its not likely to see a whole lot of resistance in the Senate, but currently there is not a companion Senate bill listed in the Senate Finance Committee. This will most likely mean the House will pass the bill first, and the Senate will simply take the House version and vote on that. If the Senate doesn’t vote in any amendments, it’ll take less time to finalize as they will not have to have a conferenct report or vote.
One item which will cause congress to act faster is the fact that the current homeowners first time buyers tax credit expires Nov 30th, so they need to enact this bill before that date.
My best guess is that the bill will take about 2 weeks to clear the house, and then it all depends on how fast the Senate will move on it. If the Senate leader invokes unanimous consent, it could go very quickly.
Most likely I would say late October is the best case for enactment into law, with a long estimate of the end of November. The healthcare debate will not help, since the Senate Finance Committee does that as well and may eat up a lot of its time and resources. But the best thing to make congress act is a firm deadline, and since supporting the troops is always a popular item w/politicians, I don’t see many of them voting against this.
The biggest drag on this will be other congressional priorities.
Marine Wife: You make a valid point. However, the proposed PCS HAP policy would not give any allowances for improvements. The guidance posted on the HAP website specifically stated that original purchase price would be used to determine value. The BRAC HAP (for which the application was developed) considered both improvements to the property and appreciation. Under that program, if you bought a fixer upper and put money into it, you’d stand a chance of getting it back–not the case as currently proposed. Under the old program, the “fair market value at the time of the announcement” would be used to determine your loss. So, if the house appreciated, you would receive some of the benefit. Under the current program, you don’t get credit for appreciation.
July 1, 2006 is somewhat arbitrary, but it was meant to show the point at which the market had peaked and began its tumble. If one bought a house after that date, they should have theoretically been able to take advantage of falling prices. If you bought before 1 Jul 06, you would have paid more for the same house. Probably the best scheme to balance everyone’s interests would be to allow the higher of the two values and put a cap on total benefits.
Remember that the purpose of the program is to alleviate financial losses that resulted from a forced government move. If I weren’t ordered to leave Tucson, I’d still be living there and would not have lost a single dime. My house would be worth about $150K less, but I wouldn’t care because I would still be enjoying it. I could have stayed in that house until the market recovered someday. Since I haven’t lived in that vacant house for over three years, I have already lost over $140K in payments, utilities, repairs and maintenance. If/when it sells, my loss on the sale will be at least another $150K.
By the way, I asked for orders back there and got laughed at. Yes, I got the “Needs of the Air Force” speech. I saluted smartly, packed up my stuff and went to my third base in 39 months–leaving me with another unsold house (fortunately it’s rented for only $1200 less than what it costs me). I’m not complaining, merely offering suggestions to improve the situation–if there’s going to be a government program, then it should be a good one.
Everything you are saying is valid-until we see the final revision of this law. Nobody knows what it is going to state. What was written seven months ago may be totally changed or rewritten. We will just have to wait and see.
Karen
I just spoke with my Shelly Berkley, my congress woman for las vegas, and was tolk by who is handeling the HAP for Nevada, her name is Roxanne, that the PCS category has been removed from the bill and also Nellis Airfore Base does not qualify for assistance…. GOD I hope this was just bad information… Please call you congress man/ woman!!!!!
Im so upset I spent everything wrong!
I applied for this when the program was first annouced. Like everyone else I’ve received many request for additional info and was told a month ago my applicaation was complete and ready.
Yesterday, I got a new e-mail requesting receipts for any home improvements and this is the answer of why they are needed.
“Preliminary benefit calculations take into consideration the prior fair market value of your property sold plus any improvements made. In order to validate the improvements listed on your application, our appraisal section must verfiy in accordance with receipts. At this point, there is not a physical inspection of the property”
Anyone think they are going to pay for home improvements?
I just spoke to my region’s HAP office, which assures me that the PCS expansion has not been removed. I contacted “Roxanne” at Congresswomen Shelly Berkley’s office but had to leave a voicemail, so I did not get further information from that office.
Nicole – I’m from Las Vegas and I am fairly sure that Congresswoman Berkley is as confused about HAP as we are. First off, the PCS category is US law, signed by the President!We are all waiting to find out who will be helped and by how much. Second, HAP for Nevada is handled by the HAP Field Office in Sacramento, not some staffer by the name of Roxanne. Third, Nellis AFB is located by some of the most decimated zip codes in the country for homeowner losses and if anyone qualifies for benefits, you can be assured folks out of the Las Vegas area will. I believe the congresswoman’s office got confused with one of the myriad of bills designed to lower CIVILIAN homeowner losses. Hope this helps…
Charles, I contacted my congress women to ask for them to get this done. Im convinced now after my converdation with her office, that she was confused and was speaking either about the HOPE or HUD programs.. Sorry for the panic!
My contact in washington said that they will be processing claims in 1-2 weeks but…and i must say but…. it will take months she said to pass this new bill to make the benifit tax free so they will process the claims for now but the seller must pay taxes untill or if this bill is passed..
I’m still peeved at the 1 July 06 date. While I understand that as the national average, it makes no sense to apply that to local regions as they vary widely as to when the market depreciated rapidly. I bought my house 2 months after that date, negotiated a lower price knowing the market was cooling but I had no idea it was that bad. It was a year later in Aug 07 that the floor dropped out of the market here in Jacksonville. I have easily lost over 20% on my house here and I was the dumb one to put 20% down and go with with a conventional. I have written my congresscritter and I have not heard back in 2 weeks.
I called Berkley’s office about this blog and I was told that someone called today that was a civilian wanting to know about HAP and that the caller was told HAP doesn’t apply to civilians. That must be your call Nicole. She also said if a military person wants an inquiry, all they have to do is write a request and she will submit one. She said she was sending the caller a copy of the legislation because her latest update was from June and offered to send me the same legislation. She said Nellis isn’t on a BRAC list to her knowledge and that she never said Nellis was removed from the list because that’s not how legislation is written. She also said legislation is done in DC, not in Las Vegas. What’s the real story Nicole? Your story doesn’t make sense.
For those who might be interested: I spoke with OSD again today and learned that the purchase price cap has definitely not been removed from the proposed implementation rules. So, if you paid more than the FNMA/FHLMC Conforming Loan Limit amount for your area, then you WILL NOT QUALIFY for any benefit whatsoever. I thought it was interesting that the SecDef has delegated authority for writing the rules down to an undersecretary. I guess the prospect of thousands more military members losing their homes and life savings doesn’t warrant his attention.
Does anyone know if DOD has published or otherwise mentioned how they are dealing with the credit issues and their impact on clearance reviews? We get a large number of requests / concerns on this issue and the “career impact” and would appreciate any information we could pass on.
Thanks. Joe Gladden
Corina,
I called Berkleys office in reference to the above entry about us needing to call our congresswoman/ man. I spoke with Roxanne just wanting ask for them to expidite this program since I have been in contract to buy one of these homes for months and nothing is happening. She then started telling me all this info that made no sence to me, about how Nellis doesnt qualifiy and PCS category was removed on June 16 and kept refering to HUD. So I called my contact Deana , Under Secretary of Defense for Acquisition, Technology, and Logistics, at 703-602-4353. These are the people getting this program going and seem to know the most about what the statis is. She said that Berkley is not on their list of Congress that is working on this and they probably dont even know about this particular program. In the next few week she said they will process claims but untill the new bill passes, sellers will pay taxes.
VinnyNY- You talk about conforming loan limits and purchase price. Please explain. Specifically, if a loan was less than the limit and purchase price is more than the limit, where does that leave a person?
Nicole, After reading your posts and it seems you are the one confused are probably telling your version of what happened. How can a congresswoman’s office help you with HAP if you don’t qualify? You aren’t military and you’re the buyer of a home. Do you believe that one call from a congress persons office is going to get HAP pushed through?
It seems to me Berkley’s office is correct. She told you HAP is not complete and she probably can’t make a request for you because you aren’t the one who would be eligible for HAP. Roxanne told me her last update was June 16, and that’s what she is sending me and obviously you. She probably told you to contact HUD because you might have a better chance at getting the information you can use as a civilian in case the house you want to buy falls through.
By your own admission, everyone you call is telling you the same thing. If your friend Deana can’t help you, why are you upset with Berkley’s office? She was really nice to me and explained that until the announcement is made, no one knows what HAP will include or exclude. I think you might be mad because Roxanne couldn’t do what you wanted her to do.
Corina,
I don’t understand why you are upset… I may not be the seller but I am in this situation and trying to my part. EVERY VOICE COUNTS!!!! I am not confused about anything, I have done my research. She was rude to me, maby because I am a civilian.. All I want is to buy my house. I am not upset with Berkleys office. the only reason I contacted them is since I have been following this blog and people on hear have asked us to contact our congress represntative…… I just want correct info from people!
And by the way, what your saying she told you is very different than what she told me. But it doesn’t matter, she was wrong!
Patty:
FNMA & FHLMC have maximum loan amounts for what they consider as “conforming loans”. The dollar amount varies from one area to another. In most areas of the country, that limit is currently $417,000. High cost areas have higher limits (e.g. NYC, DC, San Francisco, etc). You can find the FNMA/FHLMC limits for your area with a google search.
According to the proposed guidance under consideration, if your original purchase price was more than the FNMA/FHLMC conforming loan limit, then your house does not qualify for the program. It doesn’t matter how much you borrowed–just how much you paid.
All is not lost however. Any decent lawyer would argue that the limit is “arbitrary and capricious”. The FNMA/FHLMC limits have absolutely NOTHING to do with purchase price. Make sure you try to comment when the updated guidance is published in the Federal Register.
I’m not as upset about this as you are. I just want people to know Berkley’s office actually returns calls and takes the time to not only explain things but backs it up in writing. I can’t believe she is wrong if she offers to send the information to back up what she said. You said yourself she was telling you things that didn’t make sense and that you were so upset you couldn’t even spell when typing in this forum. Maybe you were so upset you only heard part of what she was saying.
VinnyNY- Thanks for the information!
In 2004 in DC, we couldn’t find a decent house under the conforming loan limits. We had to bid on 3 houses before we were successful and I went back to work to make things balance financially.
Progress…
Homeowner’s Assistance Program Update- The Interim Draft Rule for Expanded HAP was approved for publishing yesterday, September 24th! Presuming all services will come out with a message as soon as Interum Rule publishes.
Here’s the process:
1) Interim Rule should publish on the Federal Register some time next week as DOD-2009-os-0090. You can go to the Federal Register site to watch for it to post. Then check http://hap.usace.army.mil/homepage.html to confirm via Army site.
2) There will likely be a 60 day comment period on the rules.
3) Final Rule will publish after that.
What does this mean to Service Members who have applied?
Good news- PROGRESS! Army Corps will begin to process applications as soon as rule publishes. Wounded Warrior and Surviving Spouse claims will process first. According to source new rule states PCS applications will process in chronological order by report date as packages are complete. Translation, if your package is not complete you will be skipped till it is, even though you have already transferred- so get Army Corps what they need asap!
Bad news- Federal and State taxes will still be withheld from any benefit payment processed prior to Legislators passing H.R. 3590, The Servicemembers Home Ownership Act of 2009. Hopefully this bill will be fast tracked. So, if you process early, you may have your own “recovery” effort on the taxes to rectify once the bill passes.
Pass it on to those who have been waiting for news!
Yea!!!!!
Folks – We are all in this together. HAP is NOT a program the DOD supports. The DOD will always perceive that money spent on personnel is money not available for their operating budgets. Our only allies in this mess are congressmen and women. The last thing the DOD wants to do is run out of HAP money and have to request more (again it is all about tanks and planes and not the plight of military personnel).
At our base level, military life can be very rewarding, but at the federal level, it can be cold and heartless. The proposed original guidelines are ridiculoulsy restrictive on purpose. The DOD simply does not want to run low on HAP funds. There appears to be no concern for the financial ruin many military personnel face. One would think that the DOD would be beating the drum over what is happening to our military men and women who are forced to PCS in service to their country, but their near silence says it all.
As families currently eligible for the Department of Defense HAP program await updated guidelines to be published, additional funding is being proposed in the US Senate by Virginia Senator Jim Webb for Fiscal Year 2010.
Senate bill (S 1309) proposes an additional $350 million dollars to enhance the funding provided by the American Recovery and Reinvestment Act passed last fall.
Although I applaud Senator Webb’s effort, it strikes me as sad that our government can put together $3-4 Billion for an idiotic program like “Cash for Clunkers” but hasn’t yet spent a single, solitary, dime on helping military homeowners. Not one dime.
It is my understanding from the Sacramento office that once the rule is published it may take up to 120 days to receive your bennefit, after you have accepted/ delcined their letter of bennefits.
Hope I am not taking to big of a chance. I am a military and we just moved in Aug. We have a buyer for our place and are set to close on 15 Oct. We are taking loans out to make sure we can close since we are upside down by around 70,000 (owe 360,000 selling for 300,000). We boungt the place in Feb 06 so are really praying things have not changed to much.
With the interim rule comming out. How soon can we expect payment (60 days for final rule or the 120 days to receive payment both mentioned above)? I have asked what number I was several months ago by the Sacramento office and was not given one. Also, if we take the benefit before the tax issue is resolved will we be liable for those taxes? When is it anticipated that the tax bill will go up to a vote w/Congress and is it expected to pass?
There are too many variables out there for us to even speculate on what is going to happen. I don’t think that even the different districts know what is going on since nothing has been published yet so they can only go by what it was before. But these are new rules and new regs that we will be under.
I received the information from Congresswoman Berkley yesterday, and it’s exactly what they told me. It included a package from the Congressional Research Service which explains how HAP is used in the legislation. It was written on June 16 and printed on September 24, 2009. It says it is the latest update available. I also received a copy of the latest information from http://www.thomas.gov.
Corina,
I recived the packet as well and called Deana. She wrote the “final rules” and said they will be posted on Wedensday. What Shelly Berkley sent us was info on old Hap, not the new expanded hap that was part of the stim. If you want call her, her direct number is (703)602-4353.
They will know by tomorrow am if they will be able to start processing on wedenday. They are making the decision today if they will have to wait untill the new bill regarding the tax isuuse must be passed fist before they start. Your HAP office will know the rules also by the end of today aswell!
Good Luck everyone!! I wish you all the best!
Ryan,
The way it was explained to me is widows and wounded warriors are processed first which is only about 2%. I was told that Sacramento office had only 5. Then they go by your PCS order date, oldest to newest. If you have listed your home and are in contract you will be bumped up since you are ready. Contact your caseworkers tomorrow or wedensday, they should be able to tell you the rules by then.
Here is a link to H.R. 3590, The Servicemembers Home Ownership Act of 2009. “SEC. 4. EXCLUSION FROM GROSS INCOME OF QUALIFIED MILITARY BASE REALIGNMENT AND CLOSURE FRINGE”. http://www.opencongress.org/bill/111-h3590/text. You can support the bill and write your Representative.
Does anyone know how the augmented sale process will work? I know that’s one of the larger issues being considered in the rule process, but I’m curious to know the mechanics of how this will all go down. Here’s my situation: I PCS’d in 2007 and was not able to sell, so I rented (at a loss, of course). In July 2008, I listed my home again at a price of 60K less than purchase price and I have not been able to sell. I guess my bottom line question is: Will HAP authorize a lower price, consistent with the local real estate market, so that I can sell this thing?
BTW, this has been a great blog and I appreciate everyone’s constructive comments. While unsettling as this whole thing has been, its good share frustrations.
So they are going to exicute the program. The final rule is on the register as of this morning, it will be available for comment tomorrow. HAP will have guidance by the end of today.
Nicole- Do you have the link to register location?
I recived this email today:
The Rule will be formally published in the Federal Register tomorrow
(meaning that it will be available for people to post a comment). The Fed
Register allows
documents to be accessed (viewed, but not commented on) the day before
publication
You can view the list and at
http://www.archives.gov/federal-register/public-inspection/
Click on “view tomorrows Fed Register” — go to “regular filings” and then
down to Defense Department.
Deanna
First, as Tom noted earlier, this has been a great blog; it’s been the only real source of information concerning the program. I’m extremely happy that the program is finally moving and will help most of you whether you’ve sold your home, are in the process of buying one of these homes, or are still trying to sell your home. I, however, need to request your assistance now. Specifically, I need as many of you as possible to comment on the Register Filing regarding page 15 para 239.6(a)(4)(ii)(A) of DOD-2009-OS-0090; RIN 0790-A158 that excludes “Members who retire prior to reaching their mandatory retirement date.”
I’m requesting your assistance to help military members such as my sister. While I’m willing to provide more details to those requesting, the short story is that she was sent to Kabul, Afghanistan as an Individual Augmentee from March 2008 to March 2009. She put her house in Jacksonville, FL on the market in January 2008 when she received orders. She gave me a Power of Attorney and requested I keep an eye on the place from Texas. While she was away and unaware, the market plummetted 35%. Fortunately the stimulus package came out just before she returned home and I softened the blow a bit with the news that it would help with the huge loss that she is going to have to take. She qualified under the initial Implementing Guidelines and still qualifies with the exception of this “exclusion”. She submitted her retirement papers as a result of the tour in Afghanistan. Her health has digressed greatly and it’s possible she may qualify as “Ill”, but there are so many other requirements for that program that we are skeptical. She has had difficulty getting medical treatment as active duty, thus she is retiring to obtain private medical insurance and care.
If you can’t find it in your heart to help all retirees; I ask that you at least support those returning from Iraq and Afghanistan. They have sacrificed for us and we need to support them. Please post a comment in support of removing this exclusion.
http://www.federalregister.gov/OFRUpload/OFRData/2009-23418_PI.pdf This will bring you straight to the web page that continues this information.
This will be treated as taxable income unless H.R. 3590 passes so write to your congress people and dont stop until they hear us.
When I spoke with the Sacramento office today they told me they were aware that the final rules were published. My first call they said they had to wait 30 days to process, so I called Deanna and she said, No they are supposed to exicute now and treat this as an emergancy and that she was going to make the appropriate calls to the department heads. When I call later today to the Sacramento office to check up they said that they have just not recived guidance on when to exicute. SO, hopefully they get it togther this week.
Karen & Nicole,
I want to extend a personal “thank you” to the two of you. While many have contributed to this blog, the two of you have been the constants with valid information to help others. I am in contact with my Congressman, Soloman Ortiz, and have requested his help with H.R. 3590 as well as assistance in modifying the guidance to eliminate the exclusion of retirees. If enough of us band together we can overcome all these hurdles. Afterall, anyone that has followed this fiasco for over six months has to be pretty deperate. As a retiree myself, without a need for HAP, I never cease to be amazed at how poorly we are taking care of our active duty. So, in addition to my personal thanks to you, please accept my sincere thanks for your’s or your spouses’ (as the case may be) service. I wish you a speedy settlement! Oh, and if you will help my sister by posting a comment requesting the exclusion of retirees be removed, I’d be most appreciative.
Joy
Anyone have a link to where i can find the 2009 Fannie Mae/Freddie Mac conforming loan limits (as amended by the ARRA of 2009) for Fairfax County, VA?
Patty hope this will help.
http://www.fhfa.gov/GetFile.aspx?FileID=135
Patty-I just googled it. For las Vegas it was 417,000. Im not sure if that is for everywhere or just here. Hope that helps. What does that mean?
Fannie Mae and Freddie Mac conforming loan limits for the high cost areas below may not exceed the corresponding levels listed. These loan limits apply to
loans purchased between January 1, 2009 and December 31, 2009. For a one-unit property, the maximum loan limit is calculated as 1.15 times the median
house price for the highest priced county in the property’s metropolitan or micropolitan area or the median house price for the property’s county if it is in a
rural county. Regardless of the area median home price, the loan limit cannot, in general, exceed $625,500 (1.50 times the 2009 conforming loan limit). The
exceptions are properties in Alaska, Hawaii, Guam, and the Virgin Islands, where that range is 50 percent higher ($625,500 to $938,250). The 2009
conforming loan limit of $417,000 is in place everywhere else. Loan limits for 2-4 unit properties are proportional to the 1-unit limits.
VA Richmond (Metropolitan Area)
Component Counties: Amelia, Caroline, Charles City, Chesterfield, Cumberland,
Dinwiddie, Goochland, Hanover, Henrico, King and Queen, King William, Louisa, New
Kent, Powhatan, Prince George, Sussex
Also Component Cities: Colonial Heights, Hopewell, Petersburg, Richmond
$535,900 $686,050 $829,250 $1,030,600
VA Virginia Beach-Norfolk-Newport News, VA-NC (Metropolitan Area)
Component Counties (VA): Gloucester, Isle of Wight, James City, Mathews, Surry, York
Also Component Cities (VA): Chesapeake, Hampton, Newport News, Norfolk, Poquoson,
Portsmouth, Suffolk, Virginia Beach, Williamsburg
$458,850 $587,400 $710,050 $882,400
VA Washington-Arlington-Alexandria, DC-VA-MD-WV (Metropolitan Area)
Component Counties (VA): Arlington, Clarke, Fairfax, Fauquier, Loudoun, Prince
William, Spotslvania, Stafford, Warren
Also Component Cities (VA): Alexandria, Fairfax, Falls Church, Fredericksburg,
Manassas, Mannassas Park
$625,500 $800,775 $967,950 $1,202,925
The Federal Housing Finance Agency (FHFA) today announced
the conforming loan limit will remain $417,000 for 2009 for most areas in the U.S. but
specified higher limits in certain cities and counties. The conforming loan limit is the
maximum size of loans that Fannie Mae and Freddie Mac can purchase in 2009
Are those rules that are coming out waiverable or are they set in stone? For example, if I’m being forced on base as essential personel and there is a regulation out there that forces me to move will I still be eligible? Additionally, the move is under the 50 mile requirement (moving 20 miles). Any help or advice would be much appreciated!!!
Thanks everyone! I actually found a decent document at the link listed below.
In case anyone else wanted to know the conforming loan limits, check out this link
http://www.fhfa.gov/webfiles/1279/CLLarra022309_final.pdf.
The ARRA 2009 did change the max for my location!
Now to see if we will get any reimbursement!
Next question, anyone know how improvements will be figured into the calculations?
When I talked to the Savannah office about some additional documenation, they told me to gather the improvement documentation also.
Karen- So what does all that mean in referance to the final rule?
We sent in our receipts for the house improvements about three months ago. They are suppose to (yeah right we will see) add that to the purchase price and that would be the final cost of your home.
Nicole are you asking what does the Fannie Mae limits mean in the final rule?
Karen, yes. I’m not familiar with this
As I read federal register information released yesterday, you could not have paid more than the conforming loan limits for your house and be eligible for the benefits.
Yes, thanks Karen for your continued dedication in following this issue.
I did a bit of calling yesterday regarding H.R. 3590 and discovered that Majority Leader Steny Hoyer is the Congressman who controls the calendar for what bills are introduced for voting.
Hence, we should all be calling his office announcing how desperate we are all for this to be introduced ASAP (at least I am).
It might be beneficial to also call the 29 co-sponors as well.
Hopefully this nightmare will be over soon.
I called our HAP region office in Fort Worth and was told they will not process the applications for 30 days for comments. Are all the regional offices on the same page or different?
I understood this was to be implemented as an emergency program. Please advise.
Joy,
regarding the rule on being ineligible for HAP and retiring before reaching the mandatory retirement age. I am not sure, but you may want to clarify a bit. If she has orders to PCS from Jax, she should still qualify. The rules states that none of the following listed reasons can be the cause of the relocation. retirement is listed as one of the reasons which can not be the cause.
So if your sister had orders from Jax, she should be eligible, since her relocation was due to orders to her IA. If she did not, and wants to retire and move after retiring, then the reason for her relocation is her choice to live elsewhere as a retireee and not in JAX.
The whole program is based on the fact that servicemen are ordered to move. If a person retires, they are not required by the military to move. In your sister’s case, if she chooses to retire, the military has not forced her to leave Jacksonville when she retires; If she had orders from the military to leave Jacksonville on her IA, then she should be eligible.
Basically, retirement does not disqualify you; you just can’t use retirement as the reason you have to sell your house.
rob
I just spoke with the Sacramento office and he said they are expecting to begin this week sometime!
So I receive an email from the caseworker handling my case in Maryland. She let me know that they use Fannie Mae’s figures in calculating decline in county values. According to Fannie Mae, my county is at an 8% decline which disqualifies me.
8% my a$$! I guarantee you that it is at least double that. Zillow.com shows over a 20% decrease. She says to wait til the 30 day waiting period on the Federal Register is up and that there is still hope for us. I’m not holding my breath.
I just spoke to Sacramento office and was informed that they are preparing letters for widows and wounded soldiers to go out at the end of this week (probably) to let them know they are processing their paperwork and confirming their eligiblility. I was also told that those of us who have sold and/or are pending a sale in the PCS category will be processed next. I’m not sure what to believe anymore since it seems everytime I call the office, I get a different answer each time. Anyone with better insight???
Just got an email from the individual handling my case at the Savannah Office. She let us know that our county shows a decline of 8% and that, with the guidance they have thus far, we are disqualified.
Apparently, they are not going by a county decline rate based off the date of purchase until the time you applied for benefits. They are going off an annual decline rate that is estimated by Fannie Mae/Freddie Mac which runs from April of last year until March of this year. During this timeframe, my county shows 8% decline.
My question is, why are they not using figures based off of the time you purchased your home til present? Our county shows atleast a 20% decrease during this timeframe according to zillow.com. Our realtor shows at least a 15-16% decrease.
Is anyone else hearing anything similar? 9 months we have been convinced that we’d be helped out by this program only to find out that, in the end, we are left hanging because of guidelines that make absolutely no sense.
This was on the HAP website:
The HAP website is currently being updated with the Department of Defense and Office of Management and Budget guidance for the ARRA expansion of HAP. Please check back soon.
Dan, I feel your pain. I reviewed the ‘final’ 32 CFR Part 239, at http://hap.usace.army.mil/Documents/32_CFR_Final_Rule_29-Sep-2009.pdf and it appears to me that there’s a contradiction between this document and what the Savannah office is telling you.
On page 14, it states that the minimum economic impact required to receive benefits is determined by a PCSing member who….(A) Has suffered at least a 10% market impact zone home value loss between July 1,
2006 and date of application for Expanded HAP benefits for the county/parish/city in which their
primary residence is located, and
(B) A decline of at least a 10% personal home value loss from the date of purchase to
date of sale.
Additionally, on page 23, it states: (i) Trend indications of applicants’ county, city or parish: HQUSACE subscribes the
CoreLogic real estate value database system. Districts will use the CoreLogic trend report to determine the eligibility of an applicant’s county, city, or parish. (ii) Valuation of Individual Primary Residences: Run CoreLogic AVM on an pplicant’sprimary residence.
The only mention I can find of Fannie Mae/Freddie Mac is also on page 14 but in reference to the maximum PFMV allowed.
Don’t know if this helps but it doesn’t seem that the info coming out of the Savannah office is consistent with policy.
Good luck.
Meant to say that the info coming out of the Savannah office is NOT consistent with policy…sorry for the confusion.
Dan-
Be sure to leave your comments about the 8% on the federal register. Keep fighting!
After retiring with 29.9 years of faithful service this last fall just short of my manditory retirement date due to an illness. (90% VA disability) I am out of luck. As you know senior personnel with medical problems simply retire without going through a med board. Why creat needless paper work. I can’t sale my house before my one year is up and I loose my Goverment move.
If you were injuried in direct support of combat, or during training for cambat, your out of luck as well.
Good Luck to the rest of you.
Dan,
according to the published rule, for the determination of the decline of the market(to determine if it is 10% or higher for your city/county/parrish), they are supposed to used the time from July 2006 til the date of application. I would read this portion to them on page 14 of the rule on contained on the website:
(1) Minimum Economic Impact. (i) BRAC 2005 Members and Civilian Employees as well as Permanently Reassigned Members of the Armed Forces whose primary residence:
(A) Has suffered at least a 10% market impact zone home value loss between July 1, 2006 and date of application for Expanded HAP benefits for the county/parish/city in which their
primary residence is located, and
(B) A decline of at least a 10% personal home value loss from the date of purchase to date of sale.
Rob,
I had found the paragraph in the register that you copied/pasted above and emailed it to her earlier today. Finding it temporarily suspended my hysteria. She emailed back a few hours ago and said that they (HAP personnel) were having a meeting at the end of the day and that she hoped to get back to me later with better news.
Seems pretty cut and dry to me. Provided they go by and July 2006 to the date of application, I should be good to go. Zillow shows homes in my county dropping from an average of $345K to approx $285K; well above the 10% decline needed to determine eligibility.
I’m standing by and hoping for better news tomorrow. Good luck to the rest of ya’s…
Rob and Dan,
How do I use Zillow to find out what my house has decreased by? Any help would be appreciated. Karen
Our home is in Montgomery Alabama. Thanks.
Karen,
To be honest, I don’t recall how I got my property listed on Zillow. If I’m not mistaken, I think you can simply register on the site and then, if the house is already listed by your realtor, link yourself to it. Wish I could give you something more concrete, but I don’t remember the specifics.
Just a heads up, our realtor says that Zillow estimates tend to run a little high, but it should at least give you an idea of real estate trends. Where we were showing a 20% decrease in property values in our county, our realtor crunched some numbers and came up with a 17% decrease. Not sure who’s off the mark, but it’s a handy tool regardless.
Thanks Dan but I now have butterflies in my stomach. I will email our realtor and see what she sais. Take care and I will keep my fingers crossed for all of us.
Karen,
Okay, I found a way to look up Montgomery, Alabama on Zillow. I don’t think you can do it until you register. Regardless, the news does not look promising for your area. Try following this link:
http://www.zillow.com/local-info/AL-Montgomery-home-value/r_32931/
According to this chart, the average home price in Montgomery was just over $99K in July 2006. Present day, the average is about the same. In fact, it looks like the average actually went up a tad.
Problem in your area is that home prices slightly increased in 2007 and then started declining in 2008 to where they are today. The decline, according to the numbers, was minimal.
Sorry I’m not the bearer of good news. Doesn’t look like Montgomery will meet the 10% decline to qualify. I hope I’m way off the mark and someone can provide addtl info that proves me wrong.
Karen,
LIke dan menitoned, I don’t know how accurate this is, and HAP is using some other database for their estimates. For Zillow.com, on the top menu bar you will see a tab that says local info, when you put your cursor over that, you should see a drop down menu that says real estate market reports. you can click that, and then type in Montgomery, AL in the window below the menu (go button to the right). Once on the Montgomery, AL page, in the middle section next to the graph you can click on “see more Montgomery market Stats”. That will take you to a graph of sorts to look at.
Like I said, this isn’t necessarily the data they will use, but it gets you into the zillow site for your market.
Hope it helps, and wish all of you good luck with this.
Sorry for the long post, but I thought I would share my public comments for the Federal Register.
With respect to this proposed rule, I offer the following comments:
1. 239.4 (i) USACE needs to explain the process and data behind the automated value model (AVM) in determining the market value of homes. Local property tax assessments and state real estate association statistics can either be used to dispute or correspond to an AVM produced number. Potential beneficiaries who are denied benefits because of an AVM score might be able to produce contrary numbers via other official and valid means.
2. 239.5 (d) With respect to the tax provision, language should be used to confirm whether or not taxes paid on benefits before a potential legislative fix will be re-funded retroactively. In other words, if I pay taxes on my benefit before the legislative fix, can I get a refund from the IRS after the fix is enacted?
3. 239.4 (i) With respect to home pricing, the rule should be clear regarding timeline. Right now, potential beneficiaries are being encouraged to aggressively sell their homes (at fair market value) without definitive confirmation they are eligible for benefits. Only after confirmation, should homeowners attempt to sell their home at a more aggressive pricing rate.
4. 239.4 (i) The rule states that it is the applicant’s responsibility to explain marketing efforts detailing how the price was “gradually” lowered until it reached fair market value. The term “gradually” can be interpreted differently between the USACE and the homeowner. There needs to be a definitive description of what “gradually” means to avoid disputes or time consuming appeals.
5. 239.4 (i) Are homeowners to place contingencies on sales contracts pending approval and confirmation by USACE for funds? This would demonstrate a commitment by USACE to distribute funds after/during a sale closing. Otherwise, the potential exists that USACE could back out of providing funds leaving sellers at closing without the HAP benefit.
When I talked to the Sacramento office today, they said it could take 6 to 9 months to get all the approval letters out =(. I hope not!
Got the new information from Roxanne at Congresswoman Berkley’s office yesterday and today. Yesterdays update was confirming Berkley signed on as a co-sponsor to support HAP on Sept. 17, 2009 and today I received a copy of the Federal Register confirmation. I called her today and she is going to keep track of my paperwork.
Does anyone know when the tax issue will be voted on and when they will start making payments out?
Ryan-
As for the tax issue and when it will be voted on…I’ve learned from multiple calls to the Ways and Means Committee, Congressman Rangel’s office and my Congressman, that it’s up to Congressman Hoyer to place it up for vote in the House. Since Hoyer is the Majority Leader, he sets the schedule for what is voted on when. I also learned today that the Senate is working on a bill to parallel H.R. 3590. Specifically, that Senator Claire McCaskill’s office is working on it. The individual I spoke w/ at the Ways and Means office (particularly in the “tax” part of the office) noted that they are all aware of the importance of getting this passed soon. (Apparently not as fast as the extension for Cash for Clunkers…but anyhoo).
Hopefully if we keep bombarding Hoyer’s office (which I’ve found that they are very aloof and give the canned response “We’ll pass along your sentiments to the Congressman”), something will eventually happen soon. (of course “soon” in government is subjective)
I can’t think of anything else for us to do except pray that Congress will expedite this bill within the next week or two.
Just found this on McCaskill’s Website:
September 30, 2009
McCaskill Works to Extend Homebuyer Tax Credit For Troops Serving Overseas
Legislation moves back deadline on stimulus tax credit for men and women serving abroad
WASHINGTON, D.C. – While many American families have taken advantage of the First-Time Homebuyer Tax Credit and other benefits available through the economic recovery effort, many American heroes have been deployed overseas and thus unable to take advantage of this valuable credit to help them buy a home of their own. Today, U.S. Senator Claire McCaskill introduced a bill in the Senate to extend until November 30, 2010 the availability of this credit of up to $8,000 toward the purchase of a first home for service members deployed abroad for more than 90 days during 2009.
“Buying a home is an essential part of the American dream – a dream our troops fight for – and those service members should not be denied that dream because of their service abroad,” McCaskill said.
The First Time Homebuyer Tax Credit is part of the economic development effort aimed at spurring the real estate and mortgage markets and was established in the American Recovery and Reinvestment Act (ARRA). The program offers a tax credit of up to $8,000 to qualified home-buyers toward the purchase of a first home provided the purchase is made by November 30, 2009. For members of the armed, intelligence, and foreign services whose overseas deployments could have prevented them from taking full advantage of the tax credit, McCaskill’s legislation would extend the deadline for one additional year.
Additionally, the bill would ensure that service members do not have to repay the first-time home buyer tax credit if they are deployed overseas or assigned to a new military station within three years of purchase. It would also exempt certain payments from the Department of Defense’s Housing Assistance Program (HAP) from incurring additional taxes in order to make the tax rules applicable to HAP payments consistent between previous law and the stimulus.
A companion bill has been introduced in the House of Representatives. For more information on the first time home buyer tax credit, click here.
Thanks Sara for the information! Do you have a good number to call Congressman Hoyer’s office?
Also, is there any RUMINT out there on how quickly the HAP officials can move to help people in the PCS category start closing on their upside down houses?
Ryan,
for the Tax Provision (HR 3590), I posted a comment on this earlier. I worked on Capitol Hill last year, and from my experience, it all depends on where this bill falls withing the congressional priorities. It has to pass thru the committee (its not on their schedule yet), then put on the floor calendar for a vote. If they send it to the floor under suspension of the rules (requires 2/3′s to vote yes instead of simple majority) then it will not have to go through the Rules committee (another 2-3 days) and vote/debate on amendments to the bill. Once it passes the House, it goes to the Senate who can either vote on the House version, or wait and vote on the Senate version coming out of Sen McCaskill’s office. If they pass separate bills, the two bills then have to be sorted out in conference, and then voted on again by both chambers. Yes, not very efficient, but that’s the process and it takes time. Bottom LIne: it depends on how much of a priority it is to congress. All tax bills in the Senate go through the Senate Finance Committee, which is currently bogged down on the Health Care bill. So my best guess is that it will not happen in a couple of days, more like a few weeks if all goes well. I would be hopeful to have it passed and signed into law before Thanksgiving.
Well, I wouldn’t say I have a “good” number to call the Congressman’s office…it’s just the D.C. number listed on his website.
If you’re able to move past the canned response I got, please let me know…not sure how to sweet talk the phone gatekeeper…
(202) 225-4131
Here’s his website: http://hoyer.house.gov/
Good Luck!
Personally, I might try my luck w/ the Senate side of the action…it always seems like they’re a bit more responsive.
The Senate’s Version (as copied from thomas.gov):
S.1728
Title: A bill to amend the Internal Revenue Code of 1986 to modify the first-time homebuyer credit in the case of members of the Armed Forces and certain other Federal purposes, and for other purposes.
Sponsor: Sen McCaskill, Claire [MO] (introduced 9/30/2009) Cosponsors (1)
Latest Major Action: 9/30/2009 Referred to Senate committee. Status: Read twice and referred to the Committee on Finance.
——————————————————————————–
ALL ACTIONS:
9/30/2009:
Read twice and referred to the Committee on Finance.
All,
When you call DC congressional offices, most of the time you will get an intern answering the phones. You can ask to speak to a staff memeber (ask to speak to the MLA, military legislative assistant). If the MLA takes your call, feel blessed. Most likely you will get his/her answering machine.
For Speaker Hoyers office, he actually has two capitol hill offices: his personal staff office for his district (his work as a congressman), and his office for being the speaker of the house. If you are calling to find out about bill status or when bills will move to the floor, you probably wont get much info on that, especially not until a bill passes thru committee. Every congressional office (all 435 of them)and all the committee offices call the speaker’s office all the time to get information on votes, amendments, schedules, etc. Their phones ring non-stop all day long just from calls from other offices.
Best bet is to push your own congressman to support the bill. If the majority whip’s office knows ahead of time that they have enough support to pass a bill, the bill is more likely to get to the floor faster, since sending a bill to the floor and having it fail is a big deal.
Thanks Rob…it helps to have input from someone who grasps the legislative process! I’m sure when I called I sounded like an ignorant citizen…but hopefully my concern will be passed on regardless.
Dan thanks for the info. You said that you received an email from the Savannah district. Had you contacted them? Or was this out of the blue that they contacted you? If I may, what number is your application? Thanks and have a blessed weekend. Karen
Sara,
HR 3590 is on the floor schedule for next week in the House. Most likely on Wednesday. It’s also going to the floor under suspension of the rules, which is a very good sign. Typically, when the majority leader sends a bill under suspension, that means they do not expect any opposition and should pass without any problems. It also means it will go thru without debate or amendments, which is what allows it to move faster.
This is a good sign; hopefully they will send it over to the Senate following passage, and if the Senate Majority leader thinks the bill will pass as is, he can can for a motion of unanimous consent, which will speed up the passage.
Maybe all of the phone calls helped.
Karen,
The email from the Savannah district came in response to an email I had sent them. I’ve been assigned a case worker for some time now and had gotten her email address a few weeks ago. Since I’m currently deployed, it’s so much easier to get in touch with them via email than by phone. I’m applicant #0249.
Just an update on my situation. As I stated in my earlier post, zillow.com shows an average decrease of home prices in my county at around 17%. My realtor did her own research, pulling all sold homes listed on the MLS between July 2006 to present. She’s showing an approx 15% decrease.
HAP has been directed to use the Core Logic program to estimate the decreases in property value in a given area. This is where the 8% value they quoted to me came from. They are telling me to wait it out for another thirty days when Core Logic releases the 3rd quarter numbers. They hope to see the additional 2% decrease needed at that time.
They are encouraging anyone who does not initially qualify to not give up hope. They expect the appeal process to approve many applicants who were initially denied. In my case, I meet all criteria except for the 10% county decrease. With the information I have at hand showing their numbers to be way off, I was assured I’ve got an extremely good chance of making the cut. Keeping my fingers crossed….
Thanks Rob-this is great news!
Dan thanks so much for the quick reply. I was just wondering if they had started to send out letters letting folks know that they don’t qualify. We are #0192 for Savannah.
Not sure where you got the $99,000 was the average price for a home in Montgomery certainly not in our area. We are in the low to mid $200,000. And those are the homes that have been hit the hardest. According to HUD. in Montgomery AL, there was a decrease of 24% of home sold. Is this the what they are looking at? Hope to talk soon. Karen
Dan this is what the HUD site said about Maryland as a whole, not by counties.
During 2008, slower economic growth and tight lending practices contributed to a decline in existing home sales throughout the Mid-Atlantic region. The Maryland Association of REALTORS® reported that, during the past year, the average monthly inventory of homes for sale in the state was 43,700, a decrease of 40 percent from the average recorded a year ago. Approximately 44,600 existing homes were sold in Maryland during 2008, a decrease of 27 percent compared with the 60,900 homes sold during 2007. The average home sales price declined by 6 percent to $338,300 during the past year, compared with the average price of $359,500 recorded during the previous year.
Does anyone know if the interest payments, taxes, and insurance expenses will be reimbursed for expanded HAP, or is that just for the conventional HAP? I’m pretty sure the FAQ’s for expanded HAP mentioned those costs were reimbursable last week when I looked, but when I checked today…nada.
From the FAQ site:
Q. Will the Government reimburse me for mortgage interest?
A. The Government will reimburse you for mortgage interest (not principal payments), taxes, and hazard insurance premiums that have been paid from the date the CoE District office received your application, or the date of vacation of the premises, whichever is later.
Has anyone heard anything from the Sacramento office?
As I read the final rules, if your PFMV (purchase price) is above the conforming loan limits you are not eligible for ANY assistance. If that is true, 2 military members might have bought homes next to each other with one paying $2,000 more than the other – if both homes drop in value by $100,000 but the person who paid more is $1,000 over the cap then s/he would get nothing while the other person could get $90,000!! That is outrageous – the assistance should be based on your LOAN amount being under the conforming loan limits (to benefit people who actually saved money and put down a large downpayment), not the purchase price.
Can someone tell me how to get on the federal register comment page so I can make my case? Thanks.
I have been looking for a calculator of some kind, even an example. Is there one out there?
Laura,
I am in a similar situation and also intend to make a comment on the Federal Register website. In my case, I made a $130K down payment, and my PFMV is about $30K over the conforming loan limit. According to Zillow, my home value is down about $150K. Although I can make this work financially by renting the home with only a modest amount out of my pocket every month, I can’t afford to sell and can’t afford to buy a new house.
To directly answer your question, go to http://www.regulations.gov.
Use “DOD-2009-OS-0090″ in the search field. (It will take some trial and error to get to the comments.) I don’t believe anyone has made a comment yet. Perhaps your or I will break the ice. Hopefully, others will join the cause over this issue.
Does anyone know of any influential Congressional committee members that might be able to help?
John
This FNMA/FHLMC Conforming Loan Limit for the PFMV is arbitrary and capricious. Nothing in the legislation authorizes the Sec Def to pick and choose who receives benefits based on how much they paid for their homes. If the DoD wants to limit the absolute amount of benefits paid to any beneficiary, I could accept that as an effort to ensure that the maximum number of servicemembers get help. However, eliminating a large number of potential beneficiaries using numbers that sound good is absurd.
VinnyNY- You seem to have a good grasp on the “issues” with the HAP guidelines. Any thoughts on the 10% v. 5%. I’m debating on leaving a comment on the percentage as we lost significant $ (approx 1 year’s salary) and we may not be at the 10% level.
Looks like the House is going to consider HR 3590 tomorrow as a suspension. That’s congressional code for a bill being non-controversial, and it is expected to pass the House by a voice vote with little or no debate. From Rep Cantor’s www site:
WEDNESDAY, OCTOBER 7 AND THURSDAY, OCTOBER 8, 2009
On Wednesday and Thursday, the House will meet at 10:00 a.m. for legislative business.
Suspensions (7 Bills):
1) H.R. 3590 – Service Members Home Ownership Tax Act (Sponsored by Rep. Rangel / Ways and Means Committee)
I first wanted to thank all the contributors to this forum, as it has been our main source of information over the last couple of months. What a knowledgeable and resourceful group of people!
We have a home in Phoenix that has gone down in value about $110K and applied to HAP back in March. We actually have a buyer that is hanging on so far. We put in on the market 1 Aug when it looked like HAP was imminent (or so we thought), and sold it in one week. However, the buyer needs to close by 30 Nov to take advantage of the First Time Homebuyers Credit.
After speaking to the Sacramento office late last week, we found out there is a short list for the PCS category folks that have buyers/offers on their house. We were told there are about 15 families on that list. We are of course behind the wounded warriors and spouses of wounded warriors.
They stated we should get a letter this week. What is unclear is how long it would take for them to be able to come to closing. Like many families, we cannot afford to close without HAP at the table. Many questions still remain. Will they accept our purchase price since it was only on the market 1 week? (offer is above what Zillow states value is.)
We will keep you posted. I only share our story so that everyone knows there is some movement out there! Slowly they seem to be finally getting some things done (I think…) Our hearts go out to those that have initially been told they do not qualify. Keep up the fight!
Like most of you, we do not feel the government “owes” us anything. We bought homes at our own risk and have served the country with pride for over 20 years now. Our only complaint has been the indecision and uncertainty of this program. We have all been living in “limbo” for months now. For better or worse, we just want it to be over.
Thank you everyone for your support and I wish you all the best of luck! We are fortnate to be able to now move along with escrow and buy our home!
When they came out with the final rules last week they took out the repaying of ones mortgage payments and insurance. Nobody will be getting that this time around.
Patty:
I’m wondering what the SecDef is using as his authority to discriminate between different classes of beneficiaries. The way I read the ARRA, there is no language that allows him to set differing benefit levels (95 vs. 90). It seems to be within his discretion to make the decision as to whether or not benefits are provided at all (“the Secretary may”), but I’m not sure how that translates into a policy that discriminates against active duty members. I’m going to read the legislation again…
Vinny,
regarding the authority to set different limits: the bill authorizes the SECDEF to set benenfits up to a certain limit, but does not limit beyond that. It’s his discretion. Also, the policy of setting different limits is not different than the policy of processing and paying out the other categories first(wounded warriors and surviving spouses) . That is his policy, and there is nothing in the law which prohibits that. This bill is an authorization, not a mandate. Basically, he can set the limits where he wants unless congress provides more stringent limitations. Nothing limits him to making it equal. In fact, when the bill was being reviewed back in March, DoD was considering not paying out for the PCS category and only paying for wounded warriors and surviving spouses. The worry was running out of funds. I honestly don’t know if that is still the case, but regardless, all the law does is authorize DoD to do this. It only provides an uppper limit (95%) and an authorization for 3 categories. From there, its DoD’s choice to proceed as they choose.
Is it legal? I’m pretty sure the DoD lawyers made sure of that. (they had plenty of time to figure it out) Is that fair? maybe. I pesonally feel giving 5% more (and processing claims first) to those who have lost a spouse or those who have been wounded is fair. They have lost more than I have. I can always make more money, but their loss is permanent.
Rob S:
While I agree that taking care of wounded warriors and surviving spouses makes sense on a sentimental level, the bill is not simply about compensating people for their non-material losses. Money cannot make up for the loss of a loved one or a body part. However, it can support readiness of the active duty military by mitigating the financial damage inflicted by government action. We did not choose to PCS–we were ordered to do so. We are being compensated for the government’s decision to move us at the worst possible time (financially speaking). I don’t mind spending thousands of dollars every three years in support of the “needs of the Air Force”. However, I DO mind it when Congress finally decides to do something to alleviate the suffering and the SecDef picks and chooses whom he deems worthy of relief.
I’ve lost hundreds of thousands of dollars on homes I only left because I was ordered to do so. I sacrificed my entire life savings in support of the needs of the Air Force. I piled up $100K in debt supporting the needs of the Air Force. So, I can’t afford to be as magnanimous as you. If you’re willing to give up your share of the benefit pool to ensure that every surviving spouse and wounded war receive compensation, then feel free to do so, but don’t tell the rest of us that there’s anything wrong with demanding our share. If Congress can fund idiotic programs like “Cash for Clunkers”, then it can find a few bucks to support military members.
Vinny,
I understand, and I am in a similar situation to yours. I never said there was anything wrong with your views, or your opinion on the issue. No problem at all with that. I just feel a bit differently, that’s all. I don’t agree with many of the added qualifying rules either, and I think they should be removed. So if I made you upset, I appologize.
Also, HR 3590 (removal of the tax provision) was not voted on today, but should be tomorrow. Also, the conference report on HR 2647, the NDAA, which reported out of the House today, actually added funding to the HAP program. Hopefully it will be passed. I think it was around and extra $250 million or so.
HR 3590 passed the House today, vote of 416-0. Now over to the Senate.
Just spoke to a freind who has been in touch with HAP Sacramento district. They are ready to pay on twelve of the claims!!!!! They are from wounded warriors and widows category. But this is great news for us all.
Contact your person at the HAP office that your package went to and find out how long it will be for you to be able to get paid. It will all depend on your report no later than date, the amount of WW and W there are and a few more items. We can celebrate now. Karen
Rob S,
Would you (or anyone else) have an estimate (or a guess) of how long it will take to get HR 3590 passed into law? Does anyone know if it does pass if it will be retroactive? I’d hate to close on my house and pay thousands of dollars and taxes only to have the tax free status apply only to benefits payed after the law passes, and my HAP rep said if I close before HR 3590 passes that’s a possibility.
Thanks!
Rob S:
No hurt feelings here. As someone pointed out earlier in this forum, we’re in this together because the service chiefs are not interested in actually helping servicemembers. They want more tanks, planes and ships. They fight our raises every year and push to improve golf courses rather than family housing.
We shouldn’t be worrying about how the pie gets divided up–we ought to be fighting for a bigger pie.
Have been reading these posts for some time and firmly believe that we need the support of powerful lobby groups, profit and non-profit, to engage this issue. We work with a ton of Military Families on this issue daily and decided to initiate a petition to the National Association of Realtors to push Congress to act on not only this immediate problem, but a long term solution to preventing another such disaster downstream.
No doubt most of you retained Realtors to assist you with your purchase. It’s time they step up and tell their National Association to get involved. It’s not only in their best interest, but we absolutely must take care of our Military Families.
Suggest you send your Realtor this link to the petition and encourage them to get involved. It’s very easy.
Here’s the link: http://www.moresam.net/Resources/NAR_Petition/NAR_Petition_Signatures.aspx
As a retired military member, I find it appalling that we leave our present day families hung out to dry like this. As a tax payer who is watching our government throw our taxes at anything / everything, I want them to redirect a reasonable amount to take care of our Military Families. It is critical for our readiness and it’s the right thing to do. No more stalling!
We are keeping all of you in our prayers. Joe Gladden
Marie,
I don’t know about the retro-active affect of HR 3590. I expect that if the law is passed, it would be retroactive. I will read the language again, and see if I can get anywhere with that.
Also, HR 3590 was placed on the senate calendar yesterday, but I didn’t see for exactly when. It’s a good sign, most likely pointing to the fact that they will not try to push a Senate companion bill through, and more likely will just vote on the current house version (much faster). Since it passed the House unanimously, I would think the Senate will probably just push through to a vote without any amendments. Keep your fingers crossed.
I’ll keep updating and also look into the possibility of whether or not it will be retroactive. my guess is that it will be, or at least you will be able to get it back later from the IRS if they do in fact tax it up front.
Homeowners Assistance Program (HAP): $373 million, $350 million above the President’s
request, to complete the funding requirement for the expansion of the HAP mortgage relief
program to military families required to relocate, including wounded warriors and surviving
They are looking into funding more for next year.
Just received this from the HAP office in Savanahh,
Applicants,
It is my pleasure to announce to you that approved procedures for implementation of the HAP program have been received. In an effort to expedite determination of eligibility for each of our applicants, our main focus will be to concentrate upon a thorough review of the application and its’ pertinent documentation. To assist us in expediting a determination of eligibility, we, respectfully, request that you review the updated information posted on the website (http://hap.usace.army.mil); and, for a short period of time, limit your telephone calls to our office. Once your application and documentation has been thoroughly reviewed, you will receive written notification as to the determination of your eligibility.
Please read the below information regarding your tax liabilities:
Section 1001 of the American Recovery and Reinvestment Tax Act of 2009 (ARRA) expanded the categories of eligible beneficiaries of the Homeowner’s Assistance Program (42 U.S.C. § 3374) to include wounded, injured and ill, surviving spouses, and military members required to relocate during the mortgage foreclosure and credit crisis, and personnel impacted by the BRAC 05 announcement. Because section 132 of the Internal Revenue Code was not amended at that time, these formerly marginally taxable payments became very taxable. The requirement to withhold taxes on these payments prevents this program from successfully assisting needy individuals and those whom this program specifically intended to help. The House Ways and Means Committee introduced legislation to revise the Internal Revenue Code to make ARRA expanded HAP payments nontaxable. Just when this bill will be signed into law is unknown. Unless or until this bill is signed into law, current tax law requires USACE to withhold Federal income tax from HAP benefit and reimbursement payments amounts above applicant homes’ current fair market value prior to disbursing payments to applicants or lending institutions.
Districts must, early in the application process, ensure applicants are aware of this tax liability and the Congress’ intention to change it.
Additionally, applicants must be advised that state and local taxes may be due on HAP benefits as well as the Federal taxes withheld.
We, at USACE, strongly recommend that you consult with a financial and/or tax advisor so that you will fully understand your tax liability prior to receiving HAP benefits. If you need this assistance, you can contact the Military OneSource at 800-342-9647, and representatives will be able to refer you to a tax/financial advisor in your local area. Again, it is our pleasure to finally be able to provide this program to you.
If you listed major improvements in your application, you must provide receipts for these items if you would like them to be considered. Current guidance is that the Prior Fair Market Value is the purchase price, but it is anticipated that there may be an adjustment for improvements in the final guidance. Improvements and receipts must be in accordance with the guidelines established in IRS publications 552 & 527 (http://www.irs.gov/).
An appraiser will review any provided improvement receipts to determine what additional value will be credited.
If you are unable to provide receipts in accordance with IRS publications 552 & 527, and would like for us to proceed without providing additional receipts for these improvements (which would mean not receiving additional credit for these improvements), please send us an email requesting that we continue to process your application without receipts.
We will be contacting you regarding your eligibility in the near future.
Respectfully,
Homeowners Assistance Program
Savannah District
Marie,
HR 3590 states that the tax exemption applies to all payments made under the provisions of HR 1 (the original bill for HAP expansion) made after Feb 17, 2009 (this was the date HR 1 was signed into law). I would take that to mean that any payments made will be tax free once HR 3590 is signed, and apply to all those payed out before HR 3590 is signed into law. I guess this could mean anyone who gets a HAP payment before HR 3590 becomes law would have taxes taken out of the payments, but could get this taxed amount back later.
Best thing to do would be to ask a tax accountant. Hopefully the bill will pass the senate soon, and it will not be an issue.
Rob
Rob and Karen, thanks for the info! Hopefully, HR 3590 gets put up for a vote soon and passes! Have either of you heard recently how quickly the HAP offices are going through the applicantions and paying out to those that have offers? Hopefully, they’re moving through the applications fairly quickly!
Thanks again for all the info!
Ryan,
I tt Sacramento today and they said they are still on ww and w category. They have sent only 12 letters and are ready to pay on 10.They said then they will move on to BRAC and PCS. It sounds like it will take a few months to get to the PCS category. =(
Has anyone received information pertaining to what has happened to those of use who have incurred a ton of debt as a result of PCSing and leaving our home? We tried to sell and couldn’t rent.
Eh not sure what you mean by “leaving our home.” As far as any debt incurred during a PCS move that is not going to be covered under the HAP program. Do you qualify for HAP?
Does anyone have information on H.R. 3780 vs. 3590 vs S 1728? We just found H.R. 3780 on the “Thomas.loc.gov” site and it looks like 3590, but covers only the first time homebuyer credit. I.e., is this a replacement for 3590 that would cut the HAP “tax fix” out? It seems unlikely, but this bill was introduced the same day that H.R. 3590 was passed in the house.
Brian,
Hr 3780 is not a factor. It is a similar bill, introduced by a first term congressman from NY (Rep Maffei). Rep Maffei is not even on the ways and means committee, so this bill literally has zero chance of getting passed, even if 3590 didn’t exist.
It is very rare for a first term congressman to ever pass a bill (besides House Resolutions which names post offices or designate certain dates, like Autsim Awareness day). Also, since the chairman of the ways and means committee already sponsored and passed a similar bill, its no longer an issue.
Congressmen introduce bills so they can say they have acted on an issue. I dont know why Rep Maffei would try to introduce an alternative bill like this, besides just to say that he did.
S1728 is just the Senate Companion bill, with identical language. At this point, since HR 3590 is already on the Senate calendar, the Senate will most likely just vote on HR 3590. S1728 just allows someone in the Senate to be the lead spokesperson and get some credit for advocating for the provisions in the bill.
Thanks to everyone for all of the helpful information. Does anyone know when HR 3590 will be voted on? Does “on the calendar” mean it has actually been given a date?
Rob, do you know when the HR3590 will be up for a vote in the Senate? Also if it is passed, do you expect it to take some time for the HAP folks to start implementing.
Next, has any one heard that HAP will not cover realtor fees? I heard that realtor fees were not covered the other day from a guy that called the Sacramento office. I don’t think sounds right because people need realtors to help guage the market and sell the house. I think a lot of people would have trouble if they had to do a FSBO.
Finally, does any one know what happens to those that put a lot of money into their house. For example, you buy a house for $300,000 in which you put in $100,000 of your own money. Now the house is upside down $200,000 and selling at $100,000. Would the person going through HAP be out the $100,000 of their own money that they put into the house or would they get that back somehow? I believe you can get reimbursed for improvements but I’m not sure about equity that was put into the house that’s been drained away. If anyone has any insight on how this would be treated, it would be much appreciated!
Bills placed on the calendar do not have specific dates. There are currently bills on the calendar that have been there since July.
But since HR 3590 is a non-contraversial bill, and needs to extend a deadline which is scheduled to drop in November, most likely it will be scheduled for a vote (my best guess) within the next couple of weeks.
Ryan,
Regarding realtor fees, I am pretty sure HAP covers all sellers closing costs in the reimbursements, and since sellers typically pay the realtor commissions at closing, that should be covered.
for the question on equity lost, I don’t think it matters how much you put down, just as long as you qualify under the FHA conforming loan limit. The reimbursements are based on purchase and sale price, or more specifically: the difference between 1) 90% of purchase price and 2) the sale price, plus sellers closing costs. If you financed 100% of the cost, or paid cash for your house, it doesn’t matter, the stated reimbursement formula is all based on the purchase and sale prices.
hope this helps.
Rob, thanks for the quick reply! Does the 90% mean that if I bought a house for $400K and it sold for $200K that I would be liable for 10% or $40K? This would be in addition to what I’d pay for the taxes.
It also sounds like those that put down a signigicant portion of a down payment on the purchase of a home will be out that amount?
Thanks again for the quick reply. I’m hoping they get the tax issue worked out soon as I’d like to close on my house in December given they can get through all the applicants up through my PCS date. I’ll keep my fingers crossed.
Ryan,
my understanding is in your case you would eat $40K. The
payment would be .9 times the purchase price, then subtract your sale price (.9 x 400 = 360 ; then subtact 200 to get 160. so HAP pays $160k for your $200k loss). Closing costs are paid as well as far as I understand.
10% is a lot of money for a lot of people. And I am sure a lot of people feel the government purchase option payment of 75% of the value is almost of no value to them. Eating 25% off the top is not much assistance.
We are assigned to the Savannah office. Does anyone have any idea on where they are they are in processing the applications? I’ve heard some payouts have begun, I am trying to get a sense of a timeline (and/or hope). Like many of you, we began this process back in March/April and every week is getting more challenging.
From the Navy Times: Only 2500 of the 4500 applicants are eligible??? What the…
Housing assistance checks finally in the mail
By Karen Jowers – Staff writer
Posted : Thursday Oct 22, 2009 11:46:06 EDT
About 20 checks have been cut under the newly expanded Homeowners Assistance Program, aimed at helping military homeowners caught in the housing market downturn.
Air Force Maj. John Orchard of Colorado Springs, Colo., received the first check issued under the new program on Oct. 13, two weeks after the Army Corps of Engineers got the green light to start processing applications.
“This is a huge gift from our country,” Orchard said.
He was among the first of more than 4,500 homeowners who have applied for assistance under the expanded HAP, which was signed into law Feb. 17 as part of the American Recovery and Reinvestment Act of 2009 with $555 million in funding.
Eligible for assistance are people on permanent change-of-station orders, wounded warriors, surviving spouses and those affected by base realignment and closure actions. Wounded warriors and surviving spouses have priority, although the majority of applicants are in the PCS category.
There are restrictions in each category. Full details are available online.
Orchard said his check covered about 45 percent of the losses he and his wife, Alexandra, incurred in March 2008 when they sold their Las Vegas home because of a PCS move from Nellis Air Force Base to the U.S. Air Force Academy.
The program covers a smaller portion of their losses because the first 10 percent of the loss is borne by the service member, and the HAP benefit is taxable, with taxes withheld up front. Pending legislation would exclude the HAP benefit from taxes.
Susan Clizbe, a spokeswoman for the Army Corps of Engineers, said about 2,500 applications out of the more than 4,500 filed are eligible for assistance.
The checks paid so far have been to people who have already sold their homes and suffered losses, she said. It’s not certain how long it will take to process all the applications, although the Corps has beefed up its staff and had been doing preliminary work on applications before they got the green light Sept. 30.
Orchard said he moved quickly to get his application into the Corps of Engineers Sacramento office, and sent it by Federal Express Overnight Express on Feb. 20 — just three days after the expanded provision for HAP was signed into law.
Defense officials had hoped to start the program in early summer but delayed it as they tried unsuccessfully to resolve the tax issue. Unless the law is changed, taxes have to be withheld upfront.
For now, the tax requirement will limit the number of people who can be helped, because service members who are “upside-down” on their mortgages — owing more on their mortgages than the sale price of their homes — will not have enough money to take to the table to close the sale.
2500 of 4500 qualified? Well, looks like I’m not the only one who’s been hung out to dry. We meet all criteria but one; the requirement that says your county has to have seen a 10% decrease in sales prices during the allotted timeframe. My realtor put together a nice spread sheet that shows the prices dropped 15%. Zillow.com shows 17%. Army Corps of Engineers program says it was 8%.
To their credit, ACE has been nothing but helpful throughout this evolution. They didn’t write the rules, they are just following the guidelines that were placed before them by the proverbial bean-counters. They have told me unofficially that I will not qualify, though I haven’t seen official word yet. That is supposedly going to happen within a couple of weeks.
Once it does happen, they’ve told me to file an immediate appeal. They’ve assured me that those running the appeals process will try to help out as many people as they can. They are of the opinion that, with the backup data I provided them regarding sales in my county, I should have a pretty good argument for qualifying.
I’m not holding my breath….
I am concerned that the people processing the applications are ignorant/unaware of the actual rules. In my case, the Georgia office said that because the figures for last month had gone into the “positive” that I don’t qualify. I emailed them back and said wait a minute. First of all my application was recieved 3/11/09 and therefore that is the final date that they must look at. The first date would be July 2006, the date that they are going back to. According to ACRE (alabama center for real estate at the University of Alabama which gets its figures from the National Real estate center) my house has dropped in value by 21%. Trulia showes it falling even more than that. I have not heard back from them since I sent the last email. So please make sure that your processor is going by the rules per the new ruling:
BRAC 2005 Members and Civilian Employees as well as permanently Reassigned Members of the Armed Forces whose primary residence:
(A) Has suffered at least a 10% market
impact zone home value loss between
July 1, 2006 and date of application for Expanded HAP benefits for the county/ parish/city in which their primary residence is located,
If they are only going by the latest quarter readings then they are wrong. The final date that they look at is the date that your application was received by HAP. Nobody will qualify if they are going by the last few months numbers as the housing market is getting better in some places. Be proactive people and know what is going on in your district. Do some research and find out what the figures should be so that when your processor calls you have some ammunition.
I think that they are doing the best that they can do and are doing a great job. But it comes down to this: it is your home and your loss if they do the wrong math. Stay on top of this and don’t let it slide if you can prove other wise.
Hope that the bill for the tax issue gets passed soon in the Senate so that it can go to Obama’s desk. Have a blessed week all of you.
Karen
Karen,
I’ve surfed around Trulia, but can not figure out how to find real estate trends for a particular county. Some directions, por favor?
~Shane
Hopefully this is an easy question regarding if I am eligible. I have submitted my application a few months ago and I am now waiting. My question is this, am I eligible if:
I paid $245K; sold it for $229K under a PCS (so a decline of 6.5%).
So when I sold the house it was still above the 90% watermark. But if you factor in my realtor fees/closing fees/ and home improvements I ended up taking a 15% hit.
Karen,
I had the same conversation regarding the market decline being measured at the time of application as opposed to the time of sale. They told me that one of the rules that they fully expect to change when the final guidelines are released (after the additional 30 days on register) was that they would no longer measure the decline to the date of application, but the date you sell the property.
This could be great news for some, not-so-great news for others. For us, it’s not good. Since putting in our application, sales prices have increased a couple of percent, thereby ensuring we don’t meet that county 10% decline.
~Shane
Karen,
I think you are right. There is definitely some confusion about the guidelines for market decline. I just called Savannah office to ask for clarification and they told me it was not based on HAP app date, but on sale date of property. Are they saying it’s based on HAP date if the property hasn’t sold yet?
I think the guidelines for market decline are causing a lot of confusion. I personally hope that this item is dropped completely, since the July 1, 2006 start date doesn’t make sense, and neither does using the application date as an end point. I am certain there were some markets which started dropping before July 2006, and it seems odd to pick one date for all markets to start from.
Does anyone have any idea what purpose this qualifying guideline has, other than to dis-qualify people? What purpose does showing a 10% drop in a market do for this program? I realize maybe they are meaning to prevent some one from selling well below market value to qualify for this program, but is that a realistic option? I think if some one makes a reasonable effort to sell, and sells at a 10 to 15% loss, why should it matter if the market average they are in is at least showing a 10% loss?
Anyone know the answer to Ryan B’s question?
Ryan B does not qualify. The rules state you must lose 10% off the purchase price to qualify. From the HAP website:”Individual home value must have declined at least 10%.” I realize this does not make sense when you factor in closing costs and home improvements. I complained about this in my response to the register post.
Dan
Dan go to the website and at top of page is trends, then find your state and city, go to more trends. Hope this helps. Having trouble getting this to post. Will try this again.
Just a quick thought on Trulia. Would be leery of putting to much stock in their “individual home market values or trends in market values.” Believe they apply a formula to the public record assessments, which are really not representative of true market values. This tends to give very inaccurate info on individual homes as well as trends in regional market values.
Joe Gladden
The last email (general email not specifically to me) that I received from the Savannah office said
If you listed major improvements in your application, you must provide receipts for these items if you would like them to be considered. Current guidance is that the Prior Fair Market Value is the purchase price, but it is anticipated that there may be an adjustment for improvements in the final guidance.
That may make a difference for some applications.
Just heard from a freind of mine (realtor) that she has heard that the final ruling will probably eliminate the need to show the 10% county decrease. Tonight is the final night to post any comments on the website for the ruling. Hope we will have some hard facts soon as well as news about the tax issue from Washington.
Karen
I heard today that they’re not paying realtor fees according to the Sacramento office. I don’t know if someone has already posted any comments on this to the website (not sure where to look) but I’m sure it would affect many of you.
Unless the rules changed (and it has not been decided that they will be) then they will pay for realtor fees if you sell your home. If it is government acquisition, then they will not pay for them. But this is all moot until the new rules are published.
Karen
Karen, I believe it is a Government acquisition but they said that I had to have a buyer lined up (in which I used a realtor).
From what I understand the government will purchase the house from you and then turn around, if you have a buyer, and quick deed it to them the next day.
The realtor in that case would get paid at that time by the government.
Karen, that’s exactly what I was told by the Sacramento office. I was told that the gov will purchase the house and then turn around and sell it to the people on contract either the same day or the day after. However, the HAP rep I spoke with said there is no current guidance that the realtors (buying or listing) will get paid. I hope this is wrong but I get a bad feeling when this is coming from the HAP rep. Thanks again for your help!
Just to be on the safe side Chase make sure that wording is in your contract with the realtor. Something to the affect of:
” In the event the herein listed property is sold to the United States of America, or an agency thereof, the listing broker will not be entitled to any commission or other consideration as a result of such sale.” If the listing agreement does not contain the above statement and any commission is due, it is the applicant’s responsibility to pay the commission.
As it was explained to me by our HAP rep in Savanah once the government “owns” the house they will then contract out to sell it through a realtor just as if the government was the seller.
This is what is shown on the Expanded HAP brochure right now:
The Government might purchase it from you at 75% of your
purchase price, or mortgage payoff. If this occurs, the government will sell the home to the buyer you and your realtor located and pay the realtor fees.
But we all know that everything is in flux right now until the amended rules are finalized and published. Who knows what will happen then. I just want it to be over with soon, get my house taken care of so that when we head overseas we don’t have to worry about all of this. It has been a hard and rocky road for so many of us out there. It has been harder with the promised teasers that we have had to put up with for the past 9 months. I pray that the “new” rules will help those of us that have been trying to sell our homes for the past year.
Thanks Karen for your help! I guess we’ll see what happens when the final rules are published. Do you know when the rules are supposed to be published or when the tax bill is suppose to be voted on. I thought I remember seeing that the tax bill was suppose to be voted on in the Senate before the end of October but that’s come and gone. Thanks again for your help!
Does anyone know if the closing costs/realtor fees that are reimbursed are also taxable? Or is it just the 90% of our purchase price minus the sales price amount that is taxed? Thanks for all the info.
Also, I heard that the IRS takes about 25% of your reimbursement, is that an accurate estimate?
From the HAP website under FAQ:
Q. A real estate agent expects a commission. Will the Government pay commissions when the Government purchases an applicant’s home?
A. No. Applicants should ensure that the listing agreement for their property contains the following statement: “In the event the herein listed property is sold to the United States of America, or an agency thereof, the listing broker will not be entitled to any commission or other consideration as a result of such sale.” If the listing agreement does not contain the above statement and any commission is due, it is the applicant’s responsibility to pay the commission.
I spoke with the GA office today and basically what I was told is that you have to take a 10% loss for both the private sale and the government acquisition. And that the realtor cost is only covered under the private sale. In regards to the Government Acquisition the government doesn’t really buy your home from you. You have to have a buyer lined up already and if you use a Realtor for that you are responsible for the realtor cost. They will cover 75% of the purchase price or the mortage payoff (whichever is higher) but you have to sell the home for under 90% of the originial purchase price. At that point they will cover the traditional closing cost on your end excluding the realtor. Apparently the idea of this program is not to cover all cost with selling the home but to help offset. Apparently that means I still have to bring $7000 of our money to the table whether it be to pay the difference of the 10% loss for a private sale or to cover the 6% commission for the Gov’t Acquisitoin.
Well, I’ve got some potentially good news. Talked to one of the gals at the Savannah District today who said that, more than likely, the 10% county decline requirement may be dropped. Apparently, it’s disqualified an obnoxious number of individuals for the program who would have otherwise qualified for benefits. Unfortunately, it may be another month or longer before we can expect to hear something.
Has anyone else heard this?
Hi Dan yes I have heard this too. They said that it was due to counties being so different in their makeup, because of low and high price homes falling within those boundaries, that it was not fair to add this condition.
Also spoke today to the Savanah office as well as the Washington DC office to clarify the “government acquisition” option. All this means is that once you have a contract on your home that HAP will be able to give you the funds to pay off your mortgage and then within a few days sell it to the buyer that you and your realtor have lined up. At that point is when your realtor is paid.
There are so many families out there that cannot afford to pay the 10% loss and pay for taxes. Hopefully the tax issue will be resolved before too long. But still, for some of us to come up with the 10% is going to take some creative thinking.
Hope to have good news soon for us all. It has been a long road.
Karen
Great new and thanks for the information on the “government acquistion” option!
I also spoke with the Savannah office yesterday and received some clarifying information regarding the confirmation of eligibility. Per the email guidance from Savannah, I had been patiently waiting for written confirmation on my status. However, when I called yesterday, they informed me that eligibility will not be determined until a contract or proof of sale paperwork is submitted and added to the application package. So if you’re waiting around to see if your eligible before you lower the price of your home, or even put your home on the market, you might not hear anything.
Also, they informed me that USACE will not be disclosing the AVM calculated fair market estimation of properties. This is concerning in that I don’t want to undervalue my home with an estimate provided by my realtor against the AVM number. When I explained that I was concerned, the Savannah office indicated that as long as your realtor can articulate the estimation, following guidance provided to realtors, then the USACE will likely follow your realtors estimate. So a bit of good news.
Tom,
So, basically, you can’t sell your home until you know that you’re eligible to sell your home (i.e. get assistance, otherwise, you would have sold your home already). BUT, you can’t find out if you’re eligible until you sell your home? I may be green at this but I’m failing to understand the sense in entering into a legally binding contract without knowing if you can afford to enter into a legally binding contract.
Samantha,
Again, I apologize for been green at this but, I’m confused about what “traditional closing cost excluding the realtor” means. Is the realtor’s portion the broker and seller fees (the 6% commission)? I just want to make sure.
Finally, does anyone know, now that the comment period on the proposed rules has ended, what happens next? When does the rule set get finalized?
Al – In my situation, my house is already listed at 60k less than purchase price, and the list price is arguably overpriced given the continuing decline in my market. I will likely have to lower it by another 40K to be at fair market value. The point I was making regarding eligibility is that I’m taking a chance at selling my place at a much lower rate than I would like with the “hope” I will be eligible for HAP funds. But I won’t know my final eligibility until I submit a contract or proof of sale to augment my original package. I think I would have heard by now if I was not eligible based on the other criteria. However, my angst is centered around the “leap of faith” I must take in selling my home at a price much lower than I can afford without the full knowledge I am eligible for USACE funds. To put it another way: If HAP was not a possibility, I would probably hold onto my property and bleed slowly rather than write a check for 50k at closing, with the hope that the market would get better sooner than later.
Does anyone know where they are at in the application process at the Savannah office?
Patty – we are not exactly sure where we are, although we have received an e-mail that says they need one more letter from a utility service provider which shows we had service from purchase closing until sales closing. Once we provide that, our package will be complete – although I don’t know what that means regarding how long the payout will take. With that said, who know what else they will request. We were told in Jul they had everything they would need once the rules were published and then they told us to get them more paperwork. We lost over $100,000 dollars on our home and are waiting patiently to pay off the bridge loans we had to take (yes, we decided to take the leap of faith back in Jun and trust that all this would work out). So far, so good and will be thankful for a 10% loss rather than a 32% loss. News that the payment is not tax deductible would be even better!
Patty,
Patty,
I have an application in at the savannah office, and have been contacted by a case rep, who has stated she reviewed my documents and forwarded them up to the next level. So I know they are working on PCS cases; my # is 1425, and my Report NLT date was Nov’07 (not sure on which way they are moving thru the cases).
They asked me to verify my address, so I assume I will be getting a letter soon telling me if I am qualified or not.
Has anyone been denied eligibility due to lack of the 10% decrease in county values, appealed and heard anything back yet? I’m aware of the possibility of dropping this requirement altogether, but am not holding my breath.
John,
To my understanding, they are holding off notifying individuals that they do not qualify until the numbers are out for third quarter of 2009. For example, in my case, I need another 2% decline to meet eligibility. They’ve already told me verbally that I’m falling short, but they want to see if the county declines enough in the third quarter before making a final decision.
Once that happens, they said they would formally notify applicants of non-eligibility. In the mean time, you can not appeal the decision until you receive official notification in the mail.
Rob S-
Just curious when you were last contacted as my number is about 60 higher than yours.
Patty, I finished getting all of my missing items to my case manager last week, and then yesterday, I got an email asking to verify my address. I would call and ask to speak to your assigned person (if you don’t know who it is, ask for someone handling your case). They have been very good about calling/answering email.
I know sometimes you may be afraid to be the pesty customer, but I think at this point you should not be bashful about asking for someone to atleast give you a status update on your case.
Our number with the Savanah office is 192 but our report NLT date was not until Dec 2008 so we will have a wait-of course a moot point as we do not have a contract on the house Guess we will continue to lower it by $3,000 each week until we do. My concern is letting it get too low and be penalized for that. Yo can’t win for loosing here.
Remember that “home improvements” are not just putting in new carpet, new stove or painting the house. These are not considered major improvements according to the IRS. If you replaced carpet with wood floors, that would qualify. If you added a fence or patio that would also qualify. But just upgrading on something that was already there or repairs does not qualify.
All of this is giving me a headache. We get conflicting information from each district and from each person within those districts. Nobody seems to have the correct answer and if they do, someone else will say something different.
Getting very jaded on this whole matter. Does any one else feel like a step child?
Karen
All
I am not 100% sure, but I believe the tax provisions of HR 3590 were added to senate version of HR3548, which passed the senate last night. The House is expected to vote on the Senate version of HR 3548 today. If I am reading this correctly, I believe the payments will be non-taxable.
I will check with some people and try to do a better review of the bill, but I believe its in HR3548
Dan,
Thanks for the info. I actually did get the letter saying my county doesn’t meet the 10% decline and I appealed it. I haven’t heard anything since then though and that was almost 2 weeks ago. They said they have sent it up the chain of command and are waiting to hear something from them. But I also spoke to someone who said that when you appeal, the documents just go back to the original folks for review. Maybe they are waiting for the 3rd quarter numbers to come out before they do anything. Any idea when that might be?
I wish I had found this site a long time ago – we’ve been suffering alone through the HAP process
I have looked at both bills (HR 3590 and The Senate passed version HR 3548). The section of HR 3590 which applies to HAP payments (Section 4) is identical to Section 14 of HR 3548. So it looks like when this bill passes the House today, the tax issue should become law once signed by the president, making HAP payments nontaxable.
It was just passed two minutes ago. It will now go to the President for his signature. He has seven days to do this. Hurray for us!!!!!!!
Al,
Yes the “traditional closing cost excluding the realtor” is the realtor’s portion the broker and seller fees (the 6% commission). If you go the gov’t acquistion route you are response for that.
Is anyone else being told they will have to bring a huge amount of money to the table. Unfortunately we bought the house at 155000 and still owe 151000. So the differnce between the 90% they cover still has us owing $11000.
the only thing they told me we’d need is the tax on the gap $ that HAP will give us. 25% on the gap – however, I believe we won’t have that once Obama signs the tax bill. If they do the govt acquisition for you then you shouldn’t have to come to the table with $ because its ‘whichever is more” so if your mortgage balance is more than the 75 or 90% then they’ll cover it…hope that makes sense
They cover realtor fee’s as well – with govt acquisition – you come to HAP with a contract, HAP basically buys the house from you and covers your gap – then then same day turn around and sell to your buyer and will cover realtor fee’s then
This program, for whatever reason, has the military member liable for a 10% loss (PCS members only). So Samantha in your case you have to loose 10% on your purchase price (have you made any sugnificant home improvements-new fence, drive way, room additions? If so this is added to your purchase price). DOD will come to the table with $139,500 no matter how much you end of selling the home for (assuming you sell it for less than the amount due). You are liable for anything above that point to pay off your mortgage. If I read this correctly Samantha you have only paid off $4,000 in the past four years?
As far as government acquisition goes they will not pay for realtors fees as part of the acquisition. What happens in this case is DOD turns around after purchasing it from you and sells it to the buyer you have lined up. At this point the realtor is paid their fees. They are not going to “purchase” your house until you have a buyer lined up. This is very strange but this is how it is going to work.
The tax issue has been cleared up but now we still need the interim rules clarified. Are they keeping in the 10% loss on the county? Until that comes out we don’t know.
Karen
The slide my “realty specialist” explains it this way:
Government Acquisition:
Acquire applicants home for balance of existing mortgages and sell to a purchaser that the applicant has found. Must be upside down on mortgage to be eligible.
^ Balance of existing mortgage = 190,000
^ CFMV on date of acquisition (sale to purchaser) = 140,000
^ Taxable Liability (payment above CFMV) = 50,000
^ Applicant must pay 25% taxes at closing ($12,500) ***
Applicant was able to sell at a $50,000 loss for 12,500 and the US Government paid all real estate commissions and closing cost. The commissions and closing cost are not taxed benefits.
The mortgage must be the same one that was in place as of 1 July 2006. Does not include 2nd mortgages or refinances that took place AFTER 1 July 2006. (If BRAC then 13 May 2005) It is possible to include 2nd Mortgage if it was to pay for major improvements.
*** Bill has passed in House and Senate to make benefits not taxable.
Applicant pays no closing cost or real estate commission. Government pays real estate commission on the sale to the purchaser.
Applicant must sell within 10% of current fair market value as determined by an appraisal.
SAMPLE ONLY as of 28 Oct 2009
I don’t think its strange that they do it this way – it works out best for everyone. You get out of your house and they don’t have inventory to then get rid of. If they just bought everyone’s houses, then they would be stuck with inventory – and they would run through the funding quite fast.
They can call it ‘govt acquisition’ when its basically them middlemanning, meeting you at closing, covering your gap and passing the house to the buyer
That should say “The slide my ‘realty specialist’ sent me explains it this way.
I sent her my contract this morning – crossing my fingers that it all goes smoothly and the way its described
Does anyone have an idea when they’ll make the decision whether or not to throw out the 10% decline in county home values? We’re in a major time crunch with some potential buyers and need to know if we’ll be eligible for the program. I can’t get any answers from the Fort Worth folks. We sent our appeal in like two weeks ago and still haven’t heard anything. Argh.
Does anyone know if HR3590 or HR 3548 are retroactive? We’ve been contacted by Savannah and told that we will receive our benefits check via FedEx today. When they confirmed the final payment though, they took out the 25% in taxes. Does anyone know if we will be able to get that 25% back as a result of these bills?
I’d also like to know a timeline of when the county decline requirement will be eliminated. My POC at the Savannah Office couldn’t say. Anyone else heard anything from a different POC or office?
Dan,
I sent an email to my POC at Fort Worth yesterday asking that question. I’ll let you know if I hear anything today.
The President just signed the Worker, Homeownership, and Business Assistance Act of 2009.” HAP payments are now tax free!
Yippeeeee!!! Now we all just need to get qualified!
Dan,
This is the response I got in regards to the 10% county decline requirement: “They are considering doing away with the rule but as of yet not word on if it is a sure thing or not.” So, this doesn’t help us at all. Not sure who “they” are either. Sorry I couldn’t help more.
“They” are DOD and they are the ones that are doing the final revision of the interim rules that were closed on October 30th for public comment. An analysis of the comments received is prepared and a final rule is developed. Certain modifications will be made based on public comment. This is where we want to see them ammend the ruling concerning a loss of 10% on county wide homes. So until they make the rulings, we are still stuck with the old rules.
Seems like one option to come up with the 10% is to do a short sale. I know it hurts your credit, takes time, and you have to qualify for it, but HAP says it will be treated like a private sale. So if I short sale now to get out of the house, then HAP treats it like a private sale and reimbures me for 90%, I’m supposed to pay the bank as much as I can, and my credit eats the rest? I should call the HAP office and ask about that scenario.
Has anyone received any money from the program? If so, how long did it take after you were approved?
The HAP website must be down, but I think if you go to FAQ’s – it will say about how long before you can expect to get your money. I think they said 60-90 days from when you are notified of your eligibility, but don’t quote me on that. Also, if you’re closing soon, they may try to rush it, but again, I’m not sure. Hope that helps.
As of Oct. 22nd, 20 checks had been cut. Not sure how many since then. We are friends of the Orchard’s who were the first to get their check. They submitted their application on Feb. 20th and received their check on Oct. 13th. Not sure if this helps, but I do know that checks are going out. Hang in there. Help IS on the way
An update from my friendly realtor in San Diego:
Unfortunately in all the tax hubub, we completely took for granted that the STATES would follow suit and make HAP benefits free of STATE tax. Guess what? California pushed legislation. At the last minute some Senator tried to push through a pet project as a rider to our bill. Ended up it passed CA Senate but Governor VETOED because of the rider! Good grief. Thus, HAP benefits for California claiming service members will still be taxed- at 10% till the bill passes. What a soap opera. Stay tuned for tomorrow’s episode of “As HAP Turns”.
If it is not one thing it is another.
Karen
Anyone heard anything as of late regarding dropping the “county decline” provision from the bill? I’ve been trying to get in touch with the Savannah folks, but nothing so far.
haven’t heard anything on the county decline provision, but I did see an article online that the comment period for the interim rule has been extended to January. Not sure what this will mean for the program or the prospects of altering the rules.
Well, finally got through to the Savannah Office and inquired about the county decline. I was told that they are hoping to hear something back by the end of the year and that they were pretty confident that it was going to happen. More waiting, but things are looking promising.
http://edocket.access.gpo.gov/2009/pdf/E9-27373.pdf
Go to this site and you will find the latest update on the public comment. It has been extended to Jan 2010. Not sure how this is going to affect us. Any ideas?
karen
We have a contract on our house FINALLY (on market since early April) – HAP has finally sent our packet to “benefits” – waiting to hear back from them. Current buyer does not want to pay $$ for home inspection without guarantee that HAP will cover our gap. I’ve told HAP repeatedly that we do not want to lose this buyer – they have worked with us so far – now just waiting to hear back from benefits.
I just call Virginia Department of Taxation. For Virginia, adjusted gross income is based on your federal return. With HAP benefits being tax except for the federal return, they will not affect your federal adjusted gross income, thus not affect your state return.
Has anyone contacted their military FCU and inquired about a short-term loan to cover their initial losses at closing? I’ve read in Navy Times on more than one occasion that the military-affiliated credit unions have loan programs in place to cover servicemembers who have qualified for HAP assistance. They were short-term and low interest. However, when I called NFCU today, I was told that there was nothing specific for this program and that I would have to go with a standard consumer loan that is running right around 11-12%.
We were approved around 10/10 and told our application was going to Benefits. Benefits contacted us on 10/29 and we received our check on 11/6. Taxes were withheld, but we were informed by HAP that we will get them back when we file for this year. The total amount (PCS category) included the difference after 90% reduction plus all associated closing costs/realtor fees. We had sold our house already at a significant loss (closed in August), which may have helped speed up processing of our application.
Zakary, Which office was your application handled out of and what was your application number?
Patty,
I’m working thru the Savannah office (app #1425). I was told I had all documents into the office in late October, got a letter Nov 6th stating it appeared I was qualified, and yesterday I was told that my check went in the mail Tuesday. my report NLT date was Oct 07. I still don’t know how much I’m getting, but I was told that no taxes were withheld due to the new law.
What documents are required from you the seller ref. your HAP application b/c I am not sure if HAP know (exactly) what I owe on my Mtg loan. I just completed the application process and my packet went to the Benefits Dept (this week).
Also, what is the turnaround time to expect to see a payment b/c we have buyers that requested to move in NLT 18 DEC 09 and we do not want to fall short of this window b/c our home was on the market for awhile? Thx
Now that they are paying benefits, do you still have to show up at closing with cash for the loss and the gov’t will reimburse you or will the gov’t provide a check at closing?
Received good and potentially bad news today. Good news was that our application for benefits was approved. It’s been a long wait that has finally paid off.
Bad news is this: I was told by our counselor at the HAP that assistance would be provided in one of the two following ways.
First scenario – Govt acquires our home and then immediately sells it to the buyer that we have already lined up. HAP payout would then cover the first mortgage only, not the equity loan that we took out to make some upgrades around the house. In other words, about $17K that remains on our equity loan.
Second scenario – We sell the home to the buyer ourselves with zero govt intervention. We then file the claim with HAP and they will reimburse us 90% of our original purchase price as well as pay whatever we put into the house for improvements. This scenario would have us losing about $20K.
Both scenario’s stink. I then talked to a realty specialist later on in the day who said the previous info was inaccurate and that we could actually have the govt acquire the house, sell it to our buyer and pay off the equity loan. This scenario would almost have us breaking even and would be the best case scenario.
So now I’ve got two people in the office giving me conflicting info. I’m obviously hoping the second guy I talked to has the correct info.
Days ahead will bring about the correct info. Going to be a long wait, however. Am I out $20K or am I out $0? Anyone else hearing anything similar?
Shane,
I’ve been given the same info that your first guy gave you. I’ve also read 32CFR Part 239 and I believe that your first guy and my guy are correct. Sorry.
Shane,
I should add that your 2nd guy would be right as long as you have the receipts to substantiate the 2nd mortgage and they are for improvements, not repairs.
Just to get the opinion of a HAP counselor outside the Savannah office, I gave Sacramento a call earlier and talked to a woman there who says she has worked for ACE since ’92. She went along with the second scenario in which HAP would acquire the property, pay off the first mortgage as well as the second (provided the second mortgage went towards improvements). They would then turn around and sell it to our buyer the same day.
I was also told that our realtor would still be paid for realtor fees. This was a major concern for us since she has stuck with us for the past year and has busted her tail on our behalf. Realtor fees would be paid once the property is sold to the buyer. Our realtor will get 6% total. It’s then up to her to split it with the buyers realtor.
This second point is something else I have read conflicting information on. Previously, I’ve heard that with govt acquisistion, realtors are not paid. Just one more confusing tid-bit to go along with the differing opinions floating around. I’ll keep you all posted with the upcoming details since I know there are more than a few of you who are in our predicament.
Like others, our purchase price was $13K over the conforming loan limit. However, I interpreted the register differently. It states “The PFMV may not exceed an amount equal to the 2009 Fannie Mae/Freddie Mac conforming loan limits (as amended by the ARRA of 2009).” I took this to mean the PFMV and the home purchase price could be different. Everywhere else it refers to the PFMV. So, I think a strong case could be made for benefits setting the PFMV at the conforming loan limit. Has anyone been declared eligible with an amount over the loan limit?
The folks in Savannah told me back in Jun that if we came back ineligible due to the limit we could appeal and those would be handled on a case-by-case basis (to address county location, family size, etc.). However, my application seems to keep moving. USACE SAS asked for more documentation twice since we sent it in back in May–and on 6 Nov asked if we had a contract, yet. I PCSd w/o my family back in July and am living in a cracker box until this sorts out, or I retire, which ever comes first.
In the mean time, we put in all the paperwork for a short sale and the mortgage company came out to appraise the house last week. So, we may sell via short sale, then seek re-imbursement. Our agent made us remove the HAP contingency back in September and switch to a short sale since HAP wasn’t processing applications and no one had looked at the house in 3 months. Since then, we’ve at least had a couple lookers.
Our contract has us closing on 15 Dec – however HAP says they can’t process us by then – closing may be end of dec more likely early part of Jan. They should be sending our offer letter today or monday. We need to provide buyer’s pre-approval when we accept the offer letter.
Aaron – we had to send our most recent mortgage statement in when we sent our contract to HAP
JP,
Are you doing a government buyout or private sale? If a private sale, will the corps provide a check for your loss plus closing costs at closing or do you have to wait for a reimbursement check and cough up the loss and closing costs at closing?
Thanks,
Angela
When you have the scenario as above, of governemnt acquisition, realtors are not paid at first. HAP first buys the house from you and then they turn around (sometimes same day sometimes not) and sell it to the buyer you have lined up. That is when the realtors get their commission.
When you turn in your buyer’s contract, HAP sends it to their legal department and two contracts are issued. First one between you and HAP and second one between HAP and your buyer.
If you are having problems with your local HAP office I suggest you call the DC office and speak with Don Chapman. I spoke to him last week and he said the problem they are running into is that they are dealing with untrained people and part timers.
Our problem was being told that we did not qualify for the county 10% loss rule yet all the information I was looking at was showing a loss of 20% plus. Don said that the problem is with the company that they are using for the county figures. There are over 600 counties in the US only about 20% has reportable figures that they are able to use. So if you have information that counters what you are being told, send that in to your HAP office. They will use it.
After 15 months of our home being on the market we have found a military buyer!!!! He is willing to rent from us until we can close with HAP. Praise God!!!! The selling price is $40,000 less than our original asking price but hey the end is near. We are asking for government acquisition so hope we can close before the new year. Our application is 192 and RNL was 12/1/09.
Here is to better news for us all.
Karen
Thx JP for the info and yes – we sent in our most recent mortgage statement when we mailed our contract to HAP with hopes they don’t ask us for an up-dated copy which would delay the process.
We too have buyers that we don’t want to lose.
I guess at this point – it’s a waiting game from benefits and do anyone know the turnaround time once Benefits receive your packet / application b/c our application / packet was mailed to Benefits on 17 DEC 09? Thx
OOps I was wrong on our time. It was 12/08 not this year.
Karen
JP,
What office are you working through and what was your reprot NLT date?
We are in the same boat. We have a buyer (under contract since 2 Aug) who is hanging in there so far…don’t want to loose them.
We are under the Sacramento District with a report NLT date of July 08. They have asked a couple of times for additional info, but no real movement on our packet so far.
Angela – we are doing the govt acquisition. For private sale – you have to complete the sale on your own (pay closing etc) then apply for reimbursement through HAP after you’ve closed.
Aaron – I would call HAP and find out who in benefits has your file. If I hadn’t called I’d still be sitting on the queue.
Our file went to benefits on the 14th – I called on the 18th and no-one had been assigned our file yet. They picked it up and assigned it. I hope to hear a verbal approval today – then they’ll fedex us an ‘offer letter’ that we have to sign and send back. We also have to provide pre-approval letter from our buyer. We also have to make sure we’ve paid taxes and interest up until closing as well as maintain home owners insurance until closing.
Marlo – Our original report date was Jun 09 but our orders were changed midstream and we ended up elsewhere – got report date extended to 1 Oct 09. Our regional office is Savannah. Have you sent your contract to your HAP realty specialist?
We did have one issue with HAP saying they did an appraisal (how I have no idea) and that we weren’t within 10% of fair market value – we provided additional paperwork – and then were (finally) forwarded on to benefits – who reviews and re-reviews the packet again (geeze)
Karen – fantastic news – I’m so glad you finally have a renter/buyer. We too are looking at a 40k loss (from our original purchase price). Hope you close soon!
What they are doing for appraisals is a system that some mortgage companies use. Nobody goes out to the house they just put figures into the computer and it spits out the results.
JP was your price lower than or more than the fair market value? What paper work should I have ready to show them? What is the pre approval letter that you mention? We have been paying on the house and insurance so what do they need for proof as far as that goes too?
I agree with JP. At this point everyone should have been assigned someone that is managing their case. Find out who it is and get in contact with them. It seems until you take an interest in the case, your paperwork will just sit there doing nothing. Again if you are having problems with your district, call the Washington DC office and speak with Don chapman who is in charge of the whole HAPless mess. Good luck to all. We are sending in our offer today so we will see what HAP comes up with now. Blessings to us all!!!!
Karen – our rep wouldn’t say lower or more than or provide a copy of the appraisal – was simply ‘not within 10%”. My guess is our contract was under FMV (we bought at 208k in 04 and contract was for 160k), they shouldn’t care if we were above because its less they have to pay since we’re already providing the contract/buyer. They have a sample of info to provide, I can send you that if you want. Basically anything to show that you sold/are selling your home for current fair market value and how you reached that price. Our realtor (she’s fantastic) provided comps in the area and we also had to provide an archive report that shows historically when we first put the house on the market, when we lowered the price each time etc. to current.
They haven’t asked for any proof of insurance/taxes – just when we get to closing there can’t be any taxes past due, mortgage payments due etc. (so if we settle say 15 Dec, and my mortgage is due 1 Dec, I can’t not pay the Dec mortgage and expect HAP to cover (would be nice though
) you have to be current on taxes/insurance/mortgage
MARLO – please please call your folks – ask what your status is – is your packet complete? Tell them you have a buyer, make sure they get a copy of the contract – once your realty specialist has a complete packet – they’ll do an appraisal to make sure you’re within 10% of FMV – then if all is complete they should send your packet on to benefits. They have to understand that you have a buyer that you don’t want to lose – and they should pull your packet to the top (or top of those that are in the same boat as you)
JP,
You may want to find out what the Corps’ appraisal was. They had ours at our 2003 value of 140 K. We put over 100K in improvements and upgrades into our house. We had an appraisal done recently for 230 K. Mind you in 2006, after we did all of the improvements, our home was worth 295 K when we refinanced 2 mortgages into 1.
Jp if you would send on the information that would be great. Should I have my realtor start to gather all the information now since it sounds like they will be wanting it? Thanks for your help.
Karen
Karen – where do you want me to send it?
Was hoping to have an answer from Benefits last friday or yesterday – no word. Just talked to them – their system as been down, so now an additional backlog on top of their backlog. Might not be til next week now that I hear if funds have been committed for my closing. Another week down the tubes. I sure would like to be settled and out of this house by the end of Dec..the longer this drags on, the less likely that is. I’ll be glad to not be paying a mortgage and rent at some point. Was hoping not to have to pay both for Dec. Sheesh
JP if you would please send it to midavis59@yahoo.com. Any information would be helpful. I have the figures for the past six months (how many times it was shown and when, how much the price was dropped to) but I don’t have figures for the first 9 months (six of those months were prior to HAP announcement) Do I need to contact my previous realtors? What is a pre-appproval letter that you mention having to obtain? What is the latest news with your home JP? It will do us all some good when we hear of HAP actually helping a real live family!!!! Keep us posted on what is happening with all of your cases. We can live vicariously through each winning story!!!
Karen
Karen,
we did get our check last week from Savannah. It covered all closing costs, and the $ amount was what we expected, with us absorbing the 10% loss (We were a private sale). I wish everyone else the best in getting their applications approved and paid.
Karen – docs sent
The pre-approval letter from the buyer is just pre-approval financing letter that they are pre-qualified for financing.
Nothing new on our house yet – still paying mortgage there and rent (TLF) here (more than our mortgage actually), still paying electric, water, pool and yard for Fl house, still have all our belongings in storage. I have til end of Dec before we have to start paying for HHG storage on our own. Still trying to stay afloat and not go under. Money going down the drainnnnnnn and trying to deal with holidays looming ahead.
JP,
Did you check to see what the government’s AVM stated? If they went with their AVM on our house, we would have to sell our house for 1/2 of what it’s actually worth and a 1/3 of what it was worth 3 years ago.
Jp thanks so much. Will have hubby get it from his computer. I know how you are feeling. Between the two houses and cost of upkeep on both of them (Alabama and Washington DC) it is costing us over $4000 per month. I am not working now as I am taking diplomatic training with my husband for our next tour in June. Thankfully we have not had to pay out for college this year as my son is using the post 911 GI bill. That was a mess also and took four months for him to get benefits. But that is another DOD story.
Rob great news for you. We are doing government acquisition and have not heard from anyone who has received this type of benefit. I am just thankful that with the holidays coming up we have found an active duty Major that is going to rent from us until we can close. So there is a Santa Claus!!!!
Take are and blessings to all the families for this coming holiday season.
Karen
Angela – I haven’t checked other than when I first asked and got no answer – HAP is extremely busy, they get enough email/phone calls, I don’t really care what their estimate was since I was able to show that we are selling it at FMV and they adjusted on their end.
Keep in mind – I think its sick that I have to sell my house at a loss. We bought for 208k in 04 and in 09 are selling at 160k – Also makes me sick that buyers will come in and on top of us taking a 40k loss, will ask for closing help too. Short sales are what killed us – we tried to do the right thing and not short sale but all of the houses in our area were short sales – we had no choice but to drop to their price range. Luckily we have HAP and did not have to actually short sale and ruin our credit.
That reminds me… KAREN – we also provided our recent tax appraisal (TRIM notice) which also shows the decline in our homes value – and was in range with what we are selling at
JP, I agree with you on all points. It is absolutely gross that this is happening. Our realtor found out that we were going to get government assistance and wanted to lower our house another 10 K than what our appraisal came out at. When I told her no, she had the gumption to ask me if we were going to see that 10K in our pockets. Obviously not! The NERVE!
I haven’t posted before recently but this blog has been a learning experience for me and trust me, I’ve taken it all in so that we know what we have to provide to the government.
I’m happy you were able to provide CFMV. Their AVM is outdated and inaccurate. Luckily they are using our appraisal as the CFMV so that we don’t have to sell at more of a loss just to qualify and eat up funds that could go to assist more military homeowners. I wonder though how many people have been denied because of their AVM though.
Yeah – I thought 160 was too low – our realtor kept saying it wasn’t. I kept telling her we had to be within 10% that we just can’t go way low just to get it sold. There’s right and there’s wrong…unfortunately not everybody thinks that way these days.
As stated previously, we were finally approved for govt acquisition. This despite the fact that our county only showed a 7% decline according to HAP’s numbers. Goes to show that persistence pays off.
Right now, we have our buyer lined up. She’s already in the house renting until the sale can go through. We’ve already been told that our first mortgage will be payed off in its entirety. Our second mortgage will be paid up on everything that we can show went towards home improvements.
Should be noted that providing receipts is not good enough. They want to see where the funds came out of your checking/savings/credit card. That’s gonna be a toughie. We were expecting to see about an additional $14K reimbursed from $20K borrowed. However, we can only find enough documentation at this point for $5K max. After all is said and done, we’ll probably come out of pocket about $12K. Bit of a sting, but nothing compared to some of you guys.
Will continue to keep you all posted on how things are progressing….
Great news Shane for the most part.
How long after you found a buyer did they approve you for the government acquisition? What was your HAP number and when was yor RNLT? Trying to get a feel how long the process is going to be. We are number 192, RNLT 12/08 and just turned the offer in last week. We have met the 10% personal loss as well as the county loss. Any information would be helpfull.
Karen
We just received a call from our case worker (working on a Friday holiday no doubt) stating that our case was ready to go to benefits as soon as they receive our contract. Their goal is to do 200 applications per months (that is per case worker). She said that files that did not have any home improvements on them are being processed in about 14-21 days. Those with the home improvement receipts are taking longer.
Shane what closing cost did they pay? We have down that we will pay up to $3500 towards them. Does HAP only pay certain closing cost?
Hope you and your families all had a great Thanksgiving and I wish all the best to you and yours during the upcoming holiday season. I will continue to keep you posted and let you know what is going on with my case as well as any updates I learn about HAP.
Karen
Rob S I think I meant to direct the question about closing cost to you and not Shane. What closing cost did they reimburse you for? Did they only pay certain ones? Or a percentage or what?
karen
Karen,
We have had the buyer lined up since July. She’s been living in the house and paying rent while waiting on HAP folks to give us their nod of approval. They’ve had my file sitting off to the side for the past couple of months waiting on the county numbers to drop.
I hounded them with other info that was obtained by us online as well as our realtor showing that our numbers, both personal and county, were clearly over 10%. They finally went with our numbers and pushed us to approval. Case # is mid-200′s, RNLT was 31 July.
Karen,
In our case, they paid all of our closing costs that we had. I don’t know if we had any that were non-typical, but one that I was a bit weary of was our realtor commission, because we up’d it to 7% from the typical 6% in order to sell. But, they paid it, so I guess tha’s good news for all.
Thanks for the reply ROB. So I can hope that they will pay the closing cost of 3500 plus the 6% realtors fees. We will have to see what happens. Take care and talk again soon.
Karen
Karen,
According to the Savannah office, they cover the following closing fees:
-Real estate commission
-State tax stamps
-Power of Attorney fees
-Deed tax stamps
-Pest inspection
-Recording fees
-Overnight/courier fees
-Attorney fees/document fee
-Wire fee
-Notary public fee
Karen – I was afraid that HAP wouldn’t pay closing costs toward the buyer so I didn’t take any offers where the buyer was asking for closing costs. I’m not sure if HAP pays them or not. I would guess that they wouldn’t since its above and beyond the normal closing (realtor fee’s etc) – I didn’t take the risk though so I don’t know.
Just got off the phone with our case worker from HAP. She said that she is sending our contract to benefits tonight before she leaves work. She said that they are taking about 14-28 days from this point to closing. I will be so thankfull when this is over and done with. Any one have any good news such as closed or received money for their past sale? Talk soon.
Karen
JP at what point did they ask for the other documentation such as approval letter, realtor showings etc? Before your file went to benefits or after that point? Trying to see if I still need all the additional information we have talked about.
Thanks and talk soon.
Karen
JP any news on when you will be closing? I know you were hoping for 12 dec but then said that was unlikely. What is the latest with you situation?
karen
We speak with the Sacramento office at least once a week. Although they say we are “eligible,” our realty specialist has told us they are still working out the final details on the govt. aquistion part of the benefit. She stated that no cases have been completed/paid for government aquisition thus far (from the PCS category.)
Anbody have any information to the contrary? Just trying to confirm I am working with someone who has accurate information, or if maybe things have moved quicker in other districts. I hope for everyone it is just Sacramento that has taken longer to move forward on this category of benefit.
They have said they are “close” to being ready, for 2 weeks now. We have no idea where we stand in the pile of applicants with buyers waiting…. Our thoghts are with all the families who just want this to be over.
Talked to my caseworker at the Savannah office briefly today. She had my file on her desk and was going to review it one last time before forwarding it to benefits tonight. No idea on how long it will take from that point on.
Our big concern now is how much of our second mortgage will be reimbursed. I could only come up $9K or so in receipts for improvements made to the house and, of that, have no guarantee that they will reimburse us for all of that amount. I figure worst case scenario, I may have to come out of pocket $12K or so to pay off the second loan. Bit of a sting, but nothing compared to some of the losses I’m hearing from some of you guys on here.
Karen – our file went to benefits on 15 Nov – no word from benefits by wed 18th, so I called – they picked up the file and assigned it (glad I called). We are still waiting for our offer letter to be sent. They mentioned that if they could get our titled ordered by the end of this week we could still close by the end of Dec. Tomorrow is the end of this week – and still no offer letter.
They asked for realtor showings/ history before the file went to benefits. Benefits will ask for the approval letter when I sign the offer letter (if it ever comes)
I am still in a holding pattern
Karen & JP,
What “offer letter” are you referring to. Thank you.
Angela – we’re doing govt acquisition – once your packet gets to benefits – and they review and re-review your file – funds are then committed, they send you an offer letter stating the facts /making an offer etc. You have to sign the offer letter to accept the offer and send it back, and include a pre-approval letter from the buyer. Then its on to closing.
Does anyone no how long it takes hap to review your file once all docs are signed at title and ready to close?
A friend of mine is a realtor, working out of San Diego. She was in contact with the DC office two weeks ago (Don Chapman) The FIRST government acquisition (in any of the districts) was suppose to have been accomplished last Monday and was not. I don’t understand what the hold up is with this type of benefit but it seems to be causing many problems.
Our contract was taken to benefits today (never asked for any realtor showings or anything at this point). Any Air Force people out there? When we were suppose to have the verification of service by someone in the personnel office (on page 5 of the original packet of information sent to HAP) we were told at Bolling to down load the “official proof of service ” which the AF uses. Have anyone of you done differently? We were told that this is the way the AF now verifies your service. Is this what you all have done?
Would be so nice to be finished by Christmas but I think that Santa is not going to deliver this particular gift to us this year. Talk soon.
Karen
Just heard back from our case worker. Our home was appraised at 197,000 (which is what we bought for) and we have a buyer for 176,000. Turns out it is short by $400 so that it falls within the 10% loss. So, rather than kick it out as not qualifying or having to wait to send documents to support our figures, we asked the buyer if he would up his price by $400 and we would pay it at closing to him. So she is walking the papers over to benefits now.
It is so unfair that people are not being told this information to begin with. How many people are out there that are selling their homes for whatever they can get only to find out that they are too low? Frustrating, upsetting, unhappy.
Latest I have heard is that only about 100 homes have been paid for/reimbursed for a total of $5,000,000 so far. That is an average of $50,000 per home. Wonder how many they will actually end up helping. I have not heard anymore about an increase to the original amount approved for use. But if they can get more for cash for clunkers I certainly hope they can get more for this program.
Talk soon. Karen
We sent the Sacramento office our buyer contract for our house two weeks ago today. We are told we are eligible for a government acquisition. When Kathy at the Sacramento office received our offer paperwork from the buyer she also computed our pay out. The house was originally purchased for $310,000. Our buyer offered $130,000 (Vegas market). We were told HAP will pay $163,000. We are responsible for the rest.
We’ve heard nothing more from HAP. My husband called today and was told all government acquisitions are on hold until HAP can complete a general contract. They will then start generating contracts for everyone waiting. When asked a time frame he was told probably days possibly weeks.
OK friends time for some bad, sad news. Those of us waiting for government acquisition please read on. This is inspite of what you are being told by your case workers that it will only take 30 days to come to closing. It is vitally important for you to read and take action:
Friends,
It seems we have hit another stumbling block in obtaining closure for our Service Members who are attempting “Government Acquisition” of their homes. There appears to be indefinite delay to the issuing of the acquisition contract. I would like to ask you to consider taking urgent action upon this matter. Unfortunately, as a “3rd party” who is perceived to have a financial interest (Realtor) in the final results of this situation, I am limited (although I will send a letter).
I would like to ask that you immediately contact your Congressional representatives. They helped pass HAP and should know it is still not living up to its potential for relief in a timely manner. More and more eligible Service Members are being foreclosed upon daily. If you have contact information for anyone else of influence within the Department of Defense, please contact them as well.
In doing so, express to them that you understand some good things take time and you are thankful for HAP in concept. However, the concept alone does not bring the needed financial relief. Sales are being delayed by the need of a “government acquisition purchase contract” from the Army Corps of Engineers Legal Department. For several weeks now, HAP processors have been telling applicants the contracts are forthcoming and were saying properties will close in 14 to 45 days (depending on the District). For some that 14 days has already come and gone with no government contract or funds. Each day without this contract has a substantial adverse affect on Service Members financially that will not be recovered.
Give some details of your own situation as you feel comfortable. Obviously, I do not want any of you to get into any “trouble” for sending a letter. However, as the remedy to this situation may turn out to be a matter of “law” (not rules), if we do not act now it may take several more months to resolve the issues.
I would ask that you PLEASE DO NOT copy and paste what I have written above. Be clear in your communication that you are requesting their assistance in expediting the LEGAL CONTRACT FOR GOVERNMENT ACQUISITION to be issued and the burden its lack of release places on you personally and fellow Service Members. Make it your own but keep it as brief as possible.
Potential contacts are:
-Your Senator/Representative (contact the D.C. office)
-Robert Gates, Secretary of Defense c/o Ms Deanna Buchner, Deanna.Buchner@osd.mil
** Ms. Buchner is the “Interim Rule” contact listed in the Federal Register for the Homeowner’s Assistance Program**
-Lieutenant General Robert L. Van Antwerp, Jr. the Chief of Engineers of the United States Army Send c/o hq-publicaffairs@usace.army.mil
http://www.usace.army.mil/ContactUs/Pages/default.aspx is the link for other contact numbers.
–Phone numbers for comments 9:00 am-5:00 pm Mon-Friday:
White House # 202-456-1111 or 202-456-1414
Senate- 202-224-3121
I would invite you to post any contact information and updates you come up with on http://www.HAPInformation.wordpress.com
Denise Korpinen
Realtor
Prudential California Realty
Cell (858)442-7233
Please take what is being said here seriously. We have to fight now in order to get them to move on the government acq rules. If we don’t let people know what is happening we will not win this fight. Start writting to your senators and anyone else that you think might help. This is a serious blow to us that are awaiting government acquisition.
Karen
My friend Denise, angel in disguise as a realtor, wrote also:
HAP Government Aquisition
By hapinformation
HAP is still “not happening” when it comes to Government Acquisition for PCS Service Members…As a person, I try to stay very positive in life, and on behalf of my clients. This has become a true challenge when it comes to the Homeowner’s Assistance Program for Military Service Members. As a Veteran, Military Spouse, and Realtor- I see the program as great in concept with tremendous potential. I rejoice for the 227 beneficiaries paid to date through the “Government Reimbursement” aspect (as of 12/3/09). Unfortunately this is only one small part of the 4,700 applicants to date seeking relief.
My concern is for those who are in need of “Government Acquisition”. This is the majority of applicants. Each day, not processed, costs money for housing these folks do not have to spend. They need these funds to put food on the table, clothes on their children, and pay bills incurred while waiting for processing. These applicants would likely have used the ”Government Augmentation” aspect available in the original program. In that system, the government never actually had to “own” or inventory the property to pay off the mortgage- IF the Service Member found a Buyer for the property. Most of the people I work with would have fallen into this Augmentation category.
Due to law and rule changes under “Expanded HAP”, the member must now use the “Acquisition” aspect to cover 100% of the outstanding mortgage(s). Since the day after the Federal tax legislation passed (Nov 5th) processors at each district have been indicating, “The acquisition contract should arrive any day now”. I am networked with Service Members across the U.S. who have applications in with different districts. This has been a universal answer. Some were told they could close in 14-21 days from that conversation. Each day has passed with no contract. Translated- another day with no closing and no closure.
I have continuously sought to provide timely information about HAP and be a part of the solution to any challenges as able. Further investigation into the delay in issuing contracts indicates there are additional issues caused by “the government owning the property”…even just for a few minutes! Government ownership under HAP changes the type of deed issued and title policy. According to real estate law in most areas, usual local area and property specific disclosures are not legally required once owned by the government. This would save paperwork; but creates liability questions for the Service Member and the Buyers (as well as their Realtors) that must be addressed. Other old laws require the government to take certain actions once it owns the property. These actions being required will cost more time and more HAP money unnecessarily. The Legal Department at the Army Corps seems to need some help that has not yet come to sort it all out and develop the appropriate acquisition contract. It is a difficult situation for this department to be in. No pressure Legal- but the end to an extreme financial and emotional roller coaster for 4,000 or so Service Members currently resides in your hands. Service Members and associated professionals are all happy to call or write ANYONE you need us to in order to get you the counsel needed to move “Government Acquisition” out of limbo. Just tell us who to contact…!
Since the announcement of HAP as part of the Stimulus, I have had the pleasure of speaking to many wonderful people at Department of Defense (OSD), Army Corps Program Management, and Military Legal Assistance Offices. The entire processing team at Sacramento has been wonderful with my constant calls and questions. Everyone I have spoken to wants to see Service Members receive the relief and benefits Congress has voted into law. It is clear there is still substantial team effort needed to get HAP where it needs to go…from HAPless to it’s HAPpened!
Denise
Friends we can no longer sit on our bottoms and expect someone else to help us. Now is the time to write, call, fax, email, snail mail, smoke signals or whatever it is going to take to get this moving. If you have written or called in the past, do it again. Let others know what is going on. Get your neighbors, your friends, your coworkers behind you. If we don’t do something fast and decisive, it may take months before we see any relief under the government acquisition.
Karen
Thanks so much to Karen and Denise for posting all information they have available on this website. My husband and I are part of the 4,000+ applicants with buyers waiting for the acquisition contracts to be completed so we can close on our house. We were told to find buyers. Once we found buyers we were told we should close in a matter of weeks. We are quickly depleting savings to keep ourselves afloat.
Karen, you mention communicating our position to get things moving. Other than HAP, who else can we contact? What representatives initially pushed this legislation through in the ARRA at the beginning of the year?
HAP UPDATE
See my 7 Dec 09 Post.
Additional $323M on the way and beat the 10% impact zone requirement.
Julie if you read my post of Dec 4th it gives you some people to contact. Google your state representatives and your senators to find out how to contact them.
Also it is my understanding that under government acquisition pay out, they will pay 90% of PMV (what you paid for)OR your mortage balance. Is your mortage balance more or less than what they are paying you? In our case our PMV (what we paid) was 197,000 and we now owe 189,000. Our buyer is paying 176,400 (offered 176,000 but to keep it at the 10% loss HAP called and said we had to go to 176,400.) so HAP will pay the difference of what is being offered and what we owe on our mortage, $13,600 plus closing cost and realtor’s commision once they buy it from us and turn around and sell to our buyer.
Shane, it is nice that there is more money on the way but until the gov acq contract is taken care of, it will just sit there. Until the lawyers can make sense of it nothing will move, no matter what we are being told at each district. It is not the individuals at each district that is holding this up but the lawyers trying to rewrite a law that is already a law.
This is why it is so important to start doing something now. Let those in power, those that passed this law originally, know what is going on. Tell them you are happy that this is avialable for us to use but come on, 9 plus months is long enough.
Talk soon,
Karen
Just received a letter from the HAP office stating that our “application has been found to meet all the requirements set forth under 32 CFR Part 239 and now has been sent to the government acquisition department to see what benefits we are entitled to and we will be notified in writting.” Anyone else getting this type of letter? Does this mean things are moving or am I just dreaming, again? JP is this what you have received already?
Karen
was sent via email
Karen
Shane this was posted in one of the other areas so I copied and pasted to here.
For those of you bumping up against the “10% decline in the market impact zone” requirement, we have an update. Plus, $323M in additional HAP funds on the way.
We spoke to the Corps of Engineers national project officer for HAP Friday. He told us that impact zone requirement can be disputed if sellers can provide data that indicate your immediate area was impacted more than the Corps of Engineers area studies show. He says every regional office has the discretion to allow other evidence and the national/regional offices accept other information. We know of examples here in Fairfax county VA where some areas of the county were hit much harder than other areas. Marketing surveys provided by real estate firms and appraisals from local/county governments can help. The other Shane who has been posting on this site mentioned a case like this previously where a family overturned the 10% rule using this regional office management flexibility.
Also, there is a bill working through Congress now that will add $323 million to the current HAP budget. This bill stands a high chance of passage from the Congress and the President. This additional money is projected to be enough to cover most HAP claims. Updates will follow.
Shane
Shane,
Yes, I can verify that they are now willing to approve benefits if you can provide data that disputes the program that ACE is using to measure county decline (Core Logic). In my case, we provided info from Zillow.com, Trulia.com and a survey done by our realtor that showed a decline of up to 17%. Core Logic put it at 8%. Quite the difference.
The county decline was the only thing holding up approval of our application for the past couple of months. As it stands, our package should be forwarded to benefits in the next day or two.
Never take “no” for an answer.
Karen – I am still waiting on my offer letter. Last update I got was on Thursday that my offer letter was in for review and signature. I inquired about the status this morning – will post when I get a response.
So thus far – the process seems to be – get your appliation in,
it will be reviewed for proper paperwork – once your packet is complete, has been reviewed and it appears that you are eligible, your packet is then sent to benefits. Who then reviews and re-reviews and once they approved an offer letter is generated and reviewed for signature. Seems like a whole lot of reviewing to me. Folks are drowning out there waiting for HAP to come through.
I could just scream
Got my response “Please note that your offer letter has been prepared, however due the sale price being a bit below the current fair market value, an additional review has been requested. More information should be forthcoming soon.”
OH,Jp I am so sorry. I thought you already went through this once before? This is such as mess.
I received a reply today from Lieutenant General Robert L. Van Antwerp, Jr. the Chief of Engineers of the United States Army but had been rerouted to a Realty specialist. This is the reply I received:
Ms. Davis:
We have contacted the Savannah District who handles applications in your region. They are processing your application and will contact you to discuss eligibility criteria.
Thank you for your service to our country.
Respectfully,
Diann Thompson
Realty Specialist
HQUSACE, CEMP-CR
441 G Street NW
Washington, DC 20314
Tel: 202-761-1953
Fax: 202-761-0824
I wrote her back and said thanks but I already know this. What I wanted was the General to say something about the fact why it is taking so long for this to come to an end.
Jp, keep me posted as to what happens now. Had you received a letter yet saying that it had gone to the governement acquistion side yet?
Talk later.
Karen
Hey Karen
Yes – we had been through that review before which is what frustrates me. They review, and review…and re-review..and re-review. Our rep emailed me yesterday afternoon and said
“Please note that I have received verbal confirmation from our appraisal group that the values are being validated around $162K. You will be okay. I should obatin written comfirmation by tomorrow and then I will be able to execute your offer letter. Thanks for all of your patience as we work through this process. Please let me know if you have any additional questions.”
I am hoping to hear today that she’s sent the offer letter.
I’ve asked her twice about the rumors that they’ve put Govt acquisitions on hold – and she hasn’t responded to either.
Just signed our offer letter (which came via e-mail) and sent it back! We’ve had to change the closing date 3 different times (Sept / Nov / Jan) due to HAP and now we’ve got it set for no later than Jan 31st. My contact person at HAP (Savannah) said we should be “good to go” for closing by the second week of January. We’re doing a Government acquisition. Nothing to this point has been said regarding putting it on hold so I’m still hopeful (cautiously) this nightmare will finally be over and we can start the New Year off stress free. Our home in the FL panhandle – purchased in 2005 for $307K…..selling price $179K….having all of this finally behind us…..PRICELESS!!
TJ I just pray that this is going to work out for the time line you are given. I happen to know that no government acquisiton has been processed as of yet. Believe me, there are many applications that were before you that are still waiting. According to Don CHapman in Washington DC the lawyers are still in debating mode and not getting anywhere.
TJ are all your closing cost being paid as well? Can you break it down for us the figures so we know what is being offered? Will keep my fingers and toes crossed for you and all of us.
Karen
JP hope it turns out right this time. Keep in touch.
Karen
TJ can you tell me if you are going government acquisition under BRAC or PCS?
Karen
I asked my rep at the Savannah office whether there was any truth to the claim that govt acquisitions were either suspended or not being paid. The reply I received was:
“Money not being paid is not this program, they are referring to Fort Monmouth.”
Not entirely sure what Fort Monmouth is, but from what she’s saying, our process is moving along as expected.
Shane I am not sure where you are getting your information from. The information that I am giving to this blog comes straight from Washington DC and Don Chapman. Fort Monmouth is a Fort in New Jersey and has nothing to do with government acquisitions with HAP. It was affected by the 2005 BRAC and perhaps they are having problems with their payout.
According to Lt General Robert L. Van Antwerp, Jr. the Chief of Engineers of the United States Army they are working out the kinks with the lawyers right now. No movement is expected until these issues can be resolved. Savanah and the other districts have no idea what is going on and are in the same boat we are. They will continue to tell you “that all is well” but until the first government acquistion is paid out I don’t believe them.
On November 5th, when the tax issue was settled we were told that everything was a go and payouts would start immediately. Hmmmmmm. I think that was about four weeks ago and still nothing. So as much as I wish that I was wrong and my information was poor I don’t think so.
Shane I did not mean to jump down your throat. I had just gotten off the phone with some other contacts in Washinton DC and their news was not good. So I am sorry that I took it out on you with my reply. I wish that what I was writting was dead wrong, and only time will tell, but I don’t think I am. My contacts say that the talks with the lawyers are stalled and nobody wants to make a decision about this. Until someone comes forth and decides that enough is enough we are in a stale mate.
Karen
No worries; didn’t take it as you “jumping down my throat.” More a matter of exchanging of info. I also hope you are wrong (fingers crossed). Our realtor specialist in Savannah has assured me that the application is moving along smoothly. It should have gone to appraisals by now. Appraisals should take about a week before sending it back to our rep. She would then forward it to benefits for payment.
Again, this is not a process I’m stating as “fact,” but the information that is being provided to me by Savannah. I guess time will tell whether or not she’s blowing smoke up my six. My buyer is getting antsy, so I hope they figure out something quick.
Thanks Shane. I pray that this goes quickly for us and that come the New Year (or shortly after) this will all be in the past.
Karen
Shane – you got your offer letter before appraisals and benefits??
I am still waiting on my offer letter – we found a house here we want but can’t really put in a contract with HAP contingency so now we have a house we dont’ want to lose and we don’t want to lose our buyer in fl.
JP did you get the letter saying that your contract was going to Government acquisitions?
Karen
Negative, no offer letter yet. Just confirmation via email that we had been approved and the occasional follow-up asking for additional documentation. At this point, I believe that they now have everything they need. Just hope and pray that appraisals goes along with our assessment of what the home is worth in todays market.
Karen – I am still waiting on my letter. I’ve been in benefits now since 16 Nov. I’ve heard a few times that my letter should be going out only to hit another snag. Last I heard was Tue that I would be ok and that they should have confirmation tomorrow (which would have been yesterday) and then they would be able to generate my letter. I’ve sent an email to my rep – but have gotten no response. I also emailed twice yesterday to ask about the rumors that they are holding govt acquisitions – and have gotten no response.
I don’t want to lose the buyer in FL and I don’t want to not be able to put a contract in on the house we’ve found here.
HAP is a nice concept – and will be great if it ever comes through – but I wish the powers that be would understand the situation that us military folks are in – every single day that HAP doesn’t settle on our house in fl is literally money down the drain for us. Every single day…cha-ching….cha-ching.
We have been in TLF now since the end of Sep – cha-ching. Paying mortgage in FL (cha-ching)…paying 1850 a month for stinkin TLF (cha-ching)..including 10 bucks a day for animals – 300 bucks a month..for animals in TLF – Cha-ching…paying power bill in Fl cha-ching..paying water bill in Fl…Cha-ching…going through all our savings…cha-ching…drowning..drowning ..drowning
and…we’re not as bad off as other folks
I wish the media would get ahold of this
Karen – who is Don Chapman?
JP,
Have you considered finding a furnished house that would be willing to do a short-term lease with you? When we got to Jax, we didn’t want to rush into purchasing a home that we would later regret buying. Spending weeks on end at the Navy Lodge wasn’t an option.
When we got here, we looked around on Craigslist and found a nice 3 bedroom, furnished house that we stayed in until we could find and close on our own place. We were paying all of $1300 a month. Sure beats paying out the arse at the TLF. Food for thought…
Despite not yet qualifying for HAP at the time, we rolled the dice and purchased another home anyways. It’s a buyers market and now is the time to buy. We would have been in a bad situation regardless, whether we were having to pay two mortgages or a mortgage and rent.
Jp, Don Chapman is the person in charge of HAP through the Washington DC office. JP, are you asking for a straight mortgage payoff or are you requesting that improvements be factored in? Or is this delay just because of the difference in what you are getting for your home versus the 10%?
I have contacted local media and well known media but never heard back from anyone. I don’t know who else to contact now.
Karen
Chapman is the assistant program manager for all of HAP.
Karen
JP,
I realize that you might think this is a buyer’s market, but I certainly wouldn’t be getting yourself into another mortgage. To be hones, I don’t think there is a bottom in the market yet. Homes in our area keep dropping, houses taboot are sitting on the market in our new location just waiting and wondering if buyers are going to come along. Remember, HAP can only happen once in your life.
To each his own, but my husband and I and several others I know are quite happy living in base housing until we know we are settled in retirement land. Not building any equity, nope, but sure beats the nerve racking idea of not being able to sell another house when the time comes.
Angela,
You addressed the above to JP, but I’m assuming you meant me. By all means, I know that the market can continue to sink. The decision to buy is dependent upon the market in your area and the circumstances surrounding your situation.
For us, we’ve got our potential buyer already in the home renting until the deal can be closed. Unlike many others who’s house sits empty, we have the additional money coming in by way of rent to offset the cost of two homes. Should that deal fall through, we have the funds in our bank to make the mortgage until we could find another renter (or buyer).
Additionally, we were able to slip into our new home when the individual who had it built had his financing fall through. As a result, the builder knocked over $50K off the price of the home in order to sell it asap. Bottom line, we paid just over $200K for a home with a $270K price tag. Neighbors on all side of us paid well over $300K. It was too good a deal to let pass us by.
I hope you didn’t interpret my earlier comments as me preaching to all that they should rush out and buy a house while the market is hot. That wasn’t my intention. Again, it’s an individual choice based on said individuals current situation.
Hello fellow HAPless friends,
Today they are meeting in Washinton DC to decide on the interim rules. We are not sure if they will be talking about the government acquisition or not. Below is a letter that my realty specialist angel freind has been sending out to those who will llisten:
Dear Sirs,
I am writing this letter of an urgent nature. I am aware there is a blog on your site pertaining to the Service Member’s Homeowner Assistance Program. Much good information has been exchanged there since HAP was announced. I write as someone who has had direct contact with HAP applicants nationwide, and with many of the people assigned to implement this program. I am a Navy Veteran, Military Spouse, and Realtor. My knowledge and experience is from several vantage points.
My sense of urgency is because there is a meeting in Washington D.C. tomorrow (Friday) to review the HAP Interim Rule for changes, in preparation to issue the final rule. Parties with much influence over the program will be present. The public comments have been very effective in pointing out issues that needed to be addressed. Many of the changes will be for the better. The urgency is that there has not been a “government acquisition” contract issued yet. This subject may, or may not be addressed at this meeting. It is my understanding that the attorneys involved have issue with the law as written due to conflicts with other laws. Verbiage conflicts as interpreted by the attorneys forced HAP program officials to “reinvent the wheel” from the previous “augmentation at time of close” program in an attempt to help the Service Members effectively. Unfortunately, the “Acquisition” method will be more costly than the previous “Augmentation” method. While legal issues are understood- we have to work with what we have and need to move expeditiously forward with processing acquisition applicants for payment. The need for this contract paperwork has been widely known for months. Many of our Service Members do not have any more time to wait because they are near bankruptcy and foreclosure. One processor has roughly 40 claims totalling over 7 million dollars…just waiting for the attorneys to agree upon and issue the acquisition transfer contract. Each day not closed costs these applicants hundreds to thousands of dollars they will not see again. These applicants deserve more honor and respect as members of the United States military than continued HAP delays offer them. Service Members keep to their military commitments- the Attorneys need to release HAP (acquisition) to live up to its promises.
The point to this- over time, many letters have been written to people in various positions of authority and Congressmen. These letters are funneled down the chain at Army Corps to very wonderful and committed people. These are people who do NOT have the authority necessary to issue legal a directive to stop discussing why they “can’t” complete the acquisition contract and find a way they “can”- with a specific deadline! Thus many Service Members are still holding ownership to properties that are bleeding their bank accounts dry. Hope for the relief promised since February is fading. In November after the tax legislation passed, some were told by Savannah their properties could close in 14-21 days. Sacramento said 30-45 days. Those deadlines have come and gone with no closing due to lack of government paperwork. Buyers are losing their patience. Service Members that have all documentation complete are waiting for this to end and should not be subject to indefinite delays through the holidays with no idea when they can close their homes. This has already gone on too long without remedy.
I write this letter to suggest that if you are reading this, and have relationship with the Secretary of Defense or someone close in the chain of command, that you contact them. Please ask them to take a direct and personal interest in the timeline for processing properties for “government acquisition” under the Homeowner’s Assistance Program administered by the Army Corps of Engineers. I respectfully suggest a date of December 18th, 2009, be mandated for the Attorneys to issue the HAP acquisition contract. If all those who need to be involved work as a team, this is a very reasonable date for completion. This would make the holidays much merrier for all applicants and those who have been trying to help them through difficult times!
Should you have any questions on anything contained in this letter, please feel free to contact me.
Most respectfully,
Denise Korpinen
Navy Veteran
Military Spouse
Realtor, Prudential California Realty
Cell (858)442-7233
Interesting – my HAP Rep says
“No, government acquisitions are not on hold. We have closings executed daily. Your new offer letter should go out on Monday. “
With regards to govt acquisition; does it make a difference if your buyer is already lined up? The same day Uncle Sam acquires my property, he will turn around and sell it to the buyer I’ve already got lined up. In cases like this, I really don’t see how it’s any different than me selling it myself and then turning to them for reimbursement.
For govt acquisition you have to have your buyer lined up. I’ve had mine sitting for weeks now waiting on stupid HAP. How they can’t have a general contract already for HAP is beyond me – this isn’t the firs time they’ve had to do Govt Acquisitions. If that is an issue then they should just meet folks at closing to cover their gap and get folks moving. But again – my rep said there is no hold on govt acquisitions. Although – at this point I feel rather strung-along – another week down the drain – I truly don’t expect that my letter will go out on Monday.
Karen – our is just a straight mortgage payoff – no improvements, no 2nd mortgage etc. Sounds simple right?
They estimate our FMV is 162. we are selling for 160. That shouldn’t be an issue either – but has required two reviews at this point. Entirely too much time is spent in review.
Maybe media will pay attention when this drags on long enought that military folks and their families are living in their cars.
JP the reason that they don’t have a contract is simple. The process has been stalled. Lawyers are trying to rewrite the law and can’t decide how it should be done. Again I say I pray that I am wrong but I am not.
It was explained to me why this time around for government acquisition is different but I don’t know how to explain it. I will contact my realty angel and have her break it down for me and I will get back to you. It has something to do with other things that would be required (more funds out of the HAP pot) to be done to/with the house in order for them to “own” it even for a day. But I will get back with you.
Will also let you know if there is any news from the big meeting today.
Karen
JP there are already military members living out of their cars. I have been in contact with two such families. THe member moved to their new location, now living in their car, and the family was left behind at the old station. IT it a crime for this to happen.
Karen
JP NO government acquistion have been paid out to date. So who ever said
“No, government acquisitions are not on hold. We have closings executed daily. Your new offer letter should go out on Monday. “
is lying to you or is seriously being misled. Call up Washington Dc and speak with Don Chapman and he will verify that NO government acquisitions have been paid. This is why people are upset because nobody from the districts can give them the straight story-either because they honestly don’t know or they are being told to tell us this. This makes me furious.
Karen
Just want to say, HAP worked out well for me. I closed on my house and got reimbursed on the same day. Not trying to rub it in to those who are still fighting thru the beauracracy, I just want to provide encouragement to those who are wondering if there is ever light at the end of the tunnel. I never got “approval” until I was paid. I just documented the hell out of my “reasonable effort to sell at fair market value” and ensured my Pcs dates, 10% community devaluation, etc were all well substantiated. It’s a major leap of faith in other words, but it payed off for me and my family in the end.
I have a close friend who closed using HAP the week of Thanksgiving. It was a PCS. And I know their RNT was 30Sept09. They had a buyer lined up, renting from them. HAP folks changed the date once on them, moving the date a week later, but otherwise things went smoothly. The house is located in VA, so it was the Savannah office they worked with. Not sure why there are so many different answers being given to people about this.
Shannon, did your friends use “government acquisition” or was it a “private sell” where they sold and had to loose the 10%? Or they might had had enough equity that they were able to do it that way. If you would find out under what rulling they sold under I would appreciate it.
I am not saying that money has not been paid out. As of last week HAP has payed out on 227 application out of 4700. But not one has been under the “government acquisition” rule. There have been several here on the board that have received money with Zachary being one of them. We are also hearing that at least half of those 4700 are probably not eligible for some reason or another.
Karen
I am not making up these figures or the fact that no payment has been paid out under the “government acquistion” payout. This comes straight from the main office for HAP here in Washington Dc.
Karen
Karen,
I’m not sure. I will email her to find out. I know they were going to have to come up with about $160K to close on their own. There was no way for them to come up with that amount, so they were just holding out, renting to the potential buyer until HAP got underway. I’ll see what I can find out.
All- This is Karen’s Realtor friend (although I think Karen gives me way too much credit with the “angel” thing!). I have come into contact with many of my direct info sources by my relationship with Karen. As you know from the blogs, she has been advocating from the start. All I have done is help her understand the real estate side better. We have learned a lot together and know the adventure is not over till you ALL see your properties closed!
I would like to share some little known HAP history. I have been told Mr. Don Chapman, from HAP D.C., is actually the person who helped write the HAP Legislation for ARRA. Mr. Chapman is in charge of “implementation” (rule interpretation) for HAP. He holds the position with good reason. He has been an advocate for years of providing some type of housing assistance for wounded warriors. The Bush administration went “door knocking” of sorts amongst departments for suggestions on what to put in a “stimulus package”. Mr. Chapman answered the call and came out if retirement to see this through. For the most part, HAP 2009 was meant to be the same program as old- but be “Expanded” to include more categories of beneficiaries. With new beneficiaries came additional qualifying criteria. HAP made the cut into the Stimulus and word of its inclusion gave us all great hope…
Enter the other government entities…OSD, OMB, DOJ and the government attorneys. This was no simple review. The conflicts between the “letter of the law” and the “intent of the law” began. What started as an effort to “expand” an existing program turned into a reinvention of the wheel because of a few words in the legislation. Thus, the federal tax law that we saw passed on Nov. 5th, 2009, to make the benefits tax free (remember, your state must have a law that is based on federal, or pass its own law to cover state taxes). A similar challenge arises with the government purchasing or supplementing the home sale. That is why the “Augmentation” aspect went away. They say HAP can’t use the same contract they did before or the same processing mechanisms. This is why the whole “Government Acquisition” arm of the program has become so complicated, confusing, and is taking so long. Karen posted some emails I sent on this previously so I will not rehash.
To come to date- the week before Thanksgiving folks at HAP thought they would start to issue government acquisition contracts. I talk to Sacramento Reps every few days. Everyone I have talked to there has been wonderful and knowledgeable. They thought they were going to use the old contract with a few minor updates. A DOJ attorney went out there to give a talk and when his information did not coincide with what Sacramento HAP leadership believed to be the case- the breaks were put on the acquisitions. On Dec. 4th, Mr. Chapman told me no acquisitions had been processed. Now, there is a question as to whether Savannah District managed to process a few acquisition claims using the old contract before this all went down. I don’t talk to Fort Worth District. Sacramento definitely did not process any acquisitions.
There are many applicants who have either foreclosed, have no buyer, or not even marketed their homes yet due to the questions surrounding the program. It has become pretty clear that Districts will likely process all complete applications as quickly as possible regardless of report date date if everything is in order. That is, until the money starts to get tight. I have a member whose application and purchase contract have been at HAP Sacramento since April ’09. His PCS qualifying move was July ’07. The Buyer is in the house as a tenant- thank God! Unfortunate that it is about $1,000 a month loss for the member (much like many of you). It has been quite the ride. Early Nov. we were told 30-45 days max. We were to finally close Dec. 16th (obviously we have extended the purchase contract several times). Our Benefits Rep is well aware of the situation and I know we will process as soon as Sacramento is released to do so. I will certainly post as soon as I hear anything and know will too.
I hope what I have said helps in some small way to clear some of the fog. It is such a blessing to read this blog and see you share information with each other and offer support to your fellow servicemembers and “family”. Knowledge is power- so stay armed and ready!
Karen – I am not saying that your information is wrong…I’m just posting what my savannah rep that has my file is saying.
It is sad though that HAP DC and the regional HAP offices are not on the same page.
I was told by Tashawna Sumner at the Sacramento office that the Gov acquisition has been been put on hold. She also told me that under the Gov Acquisition, if the lawers ever get everything worked out, closing costs will not be covered. This is the first time I’ve heard that closing costs are not covered. Can any one else confirm this? What about upgrades (Paver Patio, Pergola, etc…) are those upgrades covered under the Gov Acquisition? I’m assuming that if she’s telling me that HAP isn’t going to cover closing costs that they’re also not going to cover improvements. I’d love to hear from others to whether any of this is true or whether I should request a different HAP specialist that knows what’s going on?
I received word today from my rap at Savannah that our sale price has been approved. On our second mortgage, we were approved for a chunk of the improvements that went into the house. Found it strange that two items did not qualify as “improvements.” Those two were wood blinds throughout the house and a nice front load washer/dryer set.
Should be noted that the blinds were not merely an upgrade. The home was sold without blinds, so I’d think they are an improvement.
Later received an email containing a scanned memo again confirming that we met eligibility requirements and that our package was being sent to acquisitions to determine any “benefit owed” and that I would be notified in writing.
No timeframe given, so I guess it’s a bit more waiting. At least it’s forward movement, so no complaints just yet.
Thank you Denise for helping to clarify the muddy waters that I am trying to navigate in. If anyone has further questions let me know and I will have her answer them for us if she can.
Chase, I have not heard about that aspect of government acquistions but who knows what will be what when everything is ironed out. According to my rep closing cost will be paid for if they are “usual and customary” to your area. One of the posters here had 7% paid for his realtor fees so it just depends on what in the normal practice in your area.
If you have bills and receipts to verify “improvements” that is added to the PMV of the home. But if you are upside down on your mortgage it does not matter if you have improvements or not. They are only being used to give you a better figure should you be eligible for money back when they come to the table for the 90% payout.
Karen
I am new to the forum, but wanted to say thank you to everyone who has posted here. This site has been a great source of information for me as I begin the process of applying for HAP funds. I have a quick question for the group and hope that someone has already had this answered. On the HAP website under the Extended HAP benefits for PCS orders section, it states “Property purchased (or contract to purchase signed) before 1 July 2006.” Does anyone know if the “contract to purchase signed” is holding up or do you have to have closed on your house prior to 1 July 2006?
I am in a situation where I closed in the beginning of August 2006, but signed a contract in May 2006. This program would really help me out of a bind, but I’m not sure that I’m eligible. Thanks in advance for any help that you all can provide.
Rec’d my offer letter this morning – my rep is still saying that govt acquisitions are not on hold – I don’t know what to say here other than we’ll see I guess.
JP,
How long after being notified that your package was going to acquisitions did you receive that letter? Received an email yesterday letting us know our package was being forwarded, just didn’t know how long to expect before we saw something.
Shane – our package was forwarded to benefits on 14 Nov (our rep was working the weekend). I called Benefits on 18 Nov to check the status and they didn’t have it assigned. They pulled it out of the bucket (wherever the first folks send it). We have been told for almost 2 weeks now that our letter should come any day – but it got hung up in a re-review of our FMV issue. (Even though it was reviewed before it went to benefits). I rec’d the letter this morning so all in all – from 16 Nov (monday) to today. One month it took us from arrival in benefits to get our offer letter.
I’ve already signed/accepted their offer and sent the letter back in
me personally – I wouldn’t count blinds and appliances ‘improvement’s – I would call them accessories and cosmetics. we did some home repairs to get the house ready, replaced the fence, replaced the shower door and threshold etc but I wouldn’t claim them as home improvements. If we had maybe added an addition or a whole kitchen redo, maybe..IDK, I’m glad I didn’t have to mess with that part – ours is simple, one mortgage, no improvements
Karen,
RE: Previous scenario on my friend’s closing…HAP met these folks at closing to pay off the mortgage. Theirs happened rather quickly. Her husband got word he was getting orders in June. They put their house on the market in July (without official orders), had 2 offers within 3 days on their house, but discovered they could not come up with the funds to close. Originally, buyer was willing to wait for HAP, but did not want to rent. Family ended up PCSing at the end of Sept, leaving house empty. By beginning of Nov. buyer moved in to rent until closing. Closing was originally supposed to happen the week before Thanksgiving, ended up being pushed a week later. She said everything went smoothly. They must have been one that slipped in before things were put on hold.
I have two little ones and don’t have time to read all the recent posts. Here’s our situation: have had house on the market since Nov. of 2007 – were sent a letter stating we didn’t qualify due to the 10% county decline and immediately appealed – that was on Oct. 26th. We have yet to hear anything. I kept calling and emailing and just was given the runaround. Any suggestions? My thought was that maybe they’re just waiting to see if the rule is thrown out altogether instead of reviewing our appeal. Help.
John keep sendin emails or calling them. It could be that they are waiting for further guidance. But packages have been know to just sit there until you contac them. Don’t give up. What does your research show for your area? If you have any information to back up a different percentage then submit that.
Good luck.
Karen
Jp great news for you and the family. What closing cost did they pay for if I might ask?
Karen
John,
What district are you in? We are in the Ft Worth and I didn’t even have to appeal. Just so happens when I called they “got new numbers” so we are now eligible. However, we obviously have a huge hurdle to cross and that is selling our house which has been on the market since July 2008. So, God be with us.
Karen – our letter says “No realtor commissions are considered in the initial purchase transaction; however, realtor commissions are considered in the resale transaction, but will not exceed the normal and customary realtor commissions for the area.”
no other closing costs are addressed – other than we are required to be current on mortgage, taxes and interest.
You are required to bring sufficient funds to satisfy mortgage interest due on your promissory note in the form of a certified check. You will also need sufficient funds to pay real estate taxes which are prorated. If your real estate taxes and insurance are paid in escrow, any escrow balance will be reimbursed after closing by your mortgage company.
property is also subject to and required to pass an inspection three days prior to closing
JP thanks for your reply. Did your buyer ask you to pay any closing cost associated with the sale of your house?
Karen
Quick question for the HAPless: Under the “reasonable effort to sell” section of the proposed rule, the last sentence states “if an applicant is unable to sell the primary residence, the HQUSACE will determine whether efforts to sell were reasonable.” That’s it. Nothing further, but it has sure peaked my interest.
Why would they need to make this determination? Is there a possible benefit or additional action for otherwise qualified applicants if they can’t sell the home?
In my case, my list price is about bottomed out in terms of CFMV and I’m concerned I won’t get a buyer due to market conditions and the high amount of inventory in my area. I have it listed for 105K less than the purchase price and my agent hasn’t fielded one phone call. I don’t even know if I could give it away.
Tom,
The following was pulled from USACE’s website. It addressed “reasonable effort to sale.”
A. Your primary residence must be listed, actively marketed, and available for purchase for a minimum of 120 days. With regard to marketing, up must demonstrate that the asking price was within the current market value of the home as determined by the CoE automated value model (AVM) for no less than 30 days. It is your responsibility to explain marketing efforts by detailing how the asking price was gradually reduced until it reached the true current fair market value (i.e., maintaining a log containing date and asking price recorded over period of time indicating number of visits by prospective buyers and offers to purchase). If you are unable to sell the primary residence, the CoE will determine whether efforts to sell were reasonable.
I was under the impression that part of the benefits included paying for the buyers closing costs. I’m being informed now that this is not the case. Is this correct? Was buyers closing costs ever part of the benefits offered or being proposed? I can’t seem to find anything related to it now.
Shane- I’m pretty well versed with regards to the language you provided. In fact, it’s the last sentence that I’m questioning. Using current practices, if I’m not able to sell, then there’s no benefit. So, if there’s no sale, what’s the point in the CoE determining whether or not my efforts reasonable. One can only assume that there are provisions in place or being planned for those folks in a particularlly dire market. It’s quite the “hanging chad.”
Shane, this was from 9/30/09 in the Federal register for the rules. Since the meeting on Friday who knows what will happen:
(a) General Benefits: (1) If an applicant is unable to sell the primary residence after
demonstrating reasonable efforts to sell (see Definitions, §239.4(i) of this part), the Government
may purchase the primary residence for the greater of:
(i) The applicable percentage (identified by applicant type in §239.5(a)(4)) of the PFMV
of the primary residence, or
(ii) The total amount of the eligible mortgage(s) that remains outstanding.
(2) If an applicant sells, has sold, or otherwise has transferred title of the primary
residence, the benefit calculation shall be the amount of closing costs plus an amount not to
exceed the difference between the applicable percentage of the PFMV and the sales price.
The way it was explained to me was the “if the applicant sells….
means us once HAP buys it from us and then transfers it to the buyer closing cost as well as realtor fees will be paid. Again they must be normal and customary in your area.
Hope this helps and better yet, hope this is still true when all the smoke clears!!!!! By the way who is informing you otherwise?
Tom under the old rules, prior to the expantion of HAP, the government WOULD by your house from you. Then they would offer it up for sale. But when they offered it this time they decided that they just can’t handle that amount of inventory. So they took it out of the offering. You HAVE to have a buyer on board before HAP will even look at your application and get it moving. HAP just does not have the money to out and out purchase homes from us like they once did when BRAC was involved.
I hope that it works out for you.
Karen
Reviewed your posts since my last post. Answer to some of this processing is “it depends” upon your District how it will process. This is what I was told on Monday by Sacramento District about the process and I believe it sounds accurate:
-Benefits advisor collects all pertinent information from Service Member (SM), Realtors, and any closing agents involved (escrow, title, etc) and assures file is complete (especially HUD1 estimate which they base offer letter on). Check automated value and do review appraisal if needed. Should not need additional reviews/appraisals IF sale price is within 10% of Current FMV. Prepares offer letter.
Start clock…- Title report goes to District’s Attorney for review. Not sure what the turnaround will be on that part- depends on the Attorney.
-Offer letter goes to supervisor’s desk for approval.
- Once offer letter comes back and Title is approved; processor can forward the offer letter to SM and “contract” for Buyer
- SM can sign and email back acceptance
End clock…**HAP processors hoping these items will take no more than 72 hours
**Check for closing can then be cut and forwarded within 24 hours!
Remember there will be miscellaneous things that have to happen on the part of the “closing agents” to record the transfer that will affect the time from check receipt to transfer of ownership. As the Seller you won’t see these things happen. Just know there are a lot more hands touching that file than you will ever care to know- just pray they all do their job.
CLOSING COSTS
Shane posted closing fees Nov 30th as “According to the Savannah office”. This update is “according to Sacramento”: I added note*
-Real estate commission
-State tax stamps
-Power of Attorney fees
-Deed tax stamps
-Pest inspection ONLY* (no “repairs”)
-Recording fees
-Overnight/courier fees
-Attorney fees/document fee
-Wire fee
-Notary public fee
** As usual and customary for area- your Realtor should know the “definition” of this**If not- have them call me- happy to help! I want my “family” taken care of. Google my name.
Additionally, some things changed and they also cover (per Sacramento & D.C.):
-Homeowner Association Document fees
-Homeowner Association Transfer fees (NO dues)
-SM Title policy
-Buyer Homeowner Warranty if in contract between SM and Buyer
Do NOT cover:
-SM Escrow fee
-Interest or taxes through day of close
Don’t mean to “blog hog” but want to answer some of those specifics posted…can’t let Karen have all the fun!
BUYER CLOSING COSTS (sorry, missed in last post)- verbiage in real estate is real important. To my understanding, if it is “usual and customary” in your area to “credit” a buyer for “costs” then HAP should allow it. Stay vague. If the credit states for “repairs”- no dice. Need to take this into account before negotiating a purchase contract with a Buyer.
Date of July 1, 2006 for purchase cut off- I have heard tell it is part of the “law” so it will take act of Congress to change it. No, I am not kidding. You will need to write your Representatives and get another bill going. Anybody know Nancy Pelosi? In all seriousness, she controls what goes to the floor and when. Get it attached it to something popular at the last minute. There have been enough comments about this- it may have gotten someone’s attention already. Not in the know on that part just yet. If it is a “rule” issue OSD can change it. Like extending the orders date to cover 2010 summer movers. The Secretary of Defense can do that if the funds allow. HAP has to pay a few acquisitions first to see if they will have the money in the program…
Yes, this would be much simpler if the government didn’t have to “buy” the house under new rules and could just bring a check for the “difference” to close like they did in augmentation. It costs the program less to do it that way too. Expanded HAP Acquisition when the SM finds the Buyer is still less costly than if the government bought then carried homes in” inventory”. It cost an average of $29,000 per home when they did that (per Don Chapman).
Sacramento said today they sent 10 government acquisitions to Attorney for title review on Monday (more since). Waiting for Attorney to approve title so they can send out offer letters. These will be the 1st acquisitions paid out from Sacramento District. FYI- I am working with 7 different members with applications in various stages for this District. I’ve seen a few things.
Chase- Tashawna at Sacramento is very knowledgeable by my experience. Not sure how long ago she told you closing costs were not covered- as there was a point where most of them were not for “acquisition”. Things change. Now MOST of them are covered (see above post). If you are concerned about anything you are told in Sacramento, I suggest you ask for Janice Will to clarify. Janice is a solid rock in the constantly shifting HAP world. She’s been there a long time.
Savannah District- if you have concerns there ask for Bonnie Reed. She has seemed pretty solid.
Karen- you’d better get back on the phone with Savannah and find out if they got that mortgage payoff info….your appraisal was 2-3 weeks ago now and you should be getting an offer letter!
Alan- send in a copy of your initial offer acceptance with the date circled in bold ink and highlighted in some fascinating color. “HAP Applications for Dummies” so no one can miss it. Include HUD1 (closing statement) from the original purchase. Make a detailed statement about offer date in the “remarks” on your application. You should be ok if offer is from May 2006 as you say.
Shane- I don’t know how much the blinds were- but I would argue that. In Cali they are attached and are supposed to convey with the property. If there were no window treatments and you put them in- they should count. Sorry on the washer dryer- can’t support it.
John- Angela asked which District (if I were to bet- you are going to say Savannah). I am also wondering if you have an offer on the property? If not, don’t expect to hear much of anything from HAP unless it is you calling them. Don’t shoot the messenger. I don’t mean to offend you, it’s just processors are real busy right now trying to get people with completed packages and buyers breathing down their necks like Karen, Shane, JP, TJ and my friend Ralph off their desks. Once this initial acquisition push gets out the door they will get back to you. As Karen mentioned, they are also transitioning approval from that crazy county/parish rule to a straight 10% personal loss (from Prior Fair MV to sales price). It will likely come out as a change with the final rule in January. If there isn’t at least 10% loss in value on the property from purchase to sale price you will not qualify for HAP. The loss doesn’t have to be straight out of your pocket- meaning if you 100% financed, you will qualify if the current market value/sales price dropped 10% or more from purchase. If you show 10% based on what I have mentioned here AND you have a Buyer with an offer already submitted- call HAP now. If not, learn what you can from your “family” who are posting here. You will benefit from their experiences. Know it is hard with two little ones. Also know that you are the only one who can keep your application from falling through the cracks, unless your Realtor is willing to chase them around for you!
Tom & Angela- you need to find a Buyer no matter what it takes. Document the heck out of your efforts (see below). I also suggest you call your processor and tell them you have been on the market a long time (over 3-4 months becomes a long time) and really need the AVM (automated value model) amount for your property to be sure you stay within their rules. Use sugar.
Efforts to sell…in PCS Gov’t Acquisition YOU MUST FIND the BUYER- PERIOD. Only people who don’t have to are some Wounded Warriors and Surviving Spouses. To be honest- they still have to try to market and will be better off to do what is needed to find Buyer than to wait the timeframe to qualify to be bought out without one (that is where that 120 days comes in). The government does not want to own and carry houses. If they did they’d burn the approved funds faster than the money could be printed. Sales strategy for marketing and pricing depends on the area. It is a little hard to explain. Long and the short of it- you must justify to HAP you did the best possible in your given market. I would suggest starting at higher end of fair market (depending on price of home). Your realtor can do market analysis to find this price. Do it for no more than 2 weeks. Agent must document the heck out of activity (or lack thereof). If lack of activity warrants drop price every 1-2 weeks depending on activity till you get that qualified offer. You have to do it fast enough so house isn’t completely stale on market but slow enough to be in HAP guidelines (min 30 days at market value) . There is a delicate balance. I really feel for those of you in saturated markets. Here there is limited competition in most places- more buyers than houses for sale.
JP & TJ- Last but certainly not least …CONGRATS on getting your offer letters- so looking forward to hearing you have closed!
Denise – great info. It has taken both myself and my agent to keep our HAP ball rolling. You really really have to be pro-active or you will get lost in the pile
Thanks for the info. Denise. We do have buyers – and they want to close as soon as possible. For the Fort Worth district we can only call between 10am and 12pm central time and today I have been calling for exactly 2 hours. There’s only two contacts, Sarah Watts and Tina Allen and Sarah isn’t answering calls anymore – you can only correspond with her through email. Since they both check email, the responses are very confusing and they don’t appear to be communicating with each other about our case.
Does anyone have Don Chapman’s contact informatioon? Thanks to all for your help.
John- I can give you Mr. Chapman’s contact. He can get onto them, but Angela mentioned someone to me offline at Fort Worth. Let”s see if you could hook up with him…Angela?
See folks why I refer to Denise as my “angel” disguised as a realtor? And she and I have never met!!! She is ex military,a military spouse, and now married to a Naval Officer. I will forgive her on that point (being ex AF myself and married to an AF officer!!!) But she came to bat for me when I had no one else to go to at least no one that made any sense. She takes calls from me whenever I have a panic attack and always has time to talk. If she does not know the answer she will find it for you. Any one moving to the San Diego area needs to contact my Angel and know you will be in the best hands available.
Karen
John,
E-mail Denise. You can google her.
Hey- I was a Navy Corpsman, my hubby is a Marine!
Back to the HAP topic- Karen and I compared notes today on closing costs and processor comments. Her processor emailed and said a home warranty was a no go. Her Alabama real estate agent insists Home Warranty is “usual and customary” for Seller to pay there. Savannah HAP Rep says it depends on area if it is covered and says for Montgomery area it will not cover. Sacramento says Home Warranty is covered for San Diego area. Interesting.
A very HAP savvy realtor had the following to say regarding our situation. I believe it may be helpful to those who haven’t sold their homes yet.
> I have a few questions for you that I hope you can answer though I’m sure you are busy enough with your own clients.
>
> 1. How should our listing agreement read regarding a government buyout and realtor fees?
> Similar to: “In the event the herein listed property is sold to the United States of America, or an agency thereof, the listing broker will not be entitled to any commission or other consideration as a result of such sale from this Seller. Broker may been entitled to commission from government agency via sale to buyer via separate agreement.”
> 2. How do you state in the listing agreement that any contracts are contingent upon final approval and benefits from the HAP office? I ask because we need an escape hatch from potential buyers in case our package does not get final approval or the benefits are not in our favor.
> Confidential remarks/notes in MLS listing to agents only (not public part of remarks) should state similar to: “Seller has applied for DOD military seller assistance program called HAP. All sale contract terms and commissions subject to HAP/Government Agency approval”.
Any sales contract with Buyer should state similar to, “Buyer understands Seller retains right to cancel and sale is contingent upon financial assistance approval for mortgage differential and closing costs though Dept of Defense/Army Corps administered Housing Assistance Program/HAP.”
> 3. Our house was listed from July 2008 to June 2009 at 259,000 which was way too high but we couldn’t afford to come down. From June 2009 to Dec 3, 2009 it was listed at 249,000 which again was way too high but bottom dollar that we could walk away with a clean slate. Once we found out we were eligible for HAP, we had an appraisal done which came out at 230,000 and HAP Ft. Worth stated that is what they will use as our CFMV in lieu of their AVM which is basically based on old tax values. Their AVM states that our home is only worth 140,000 (we did major improvements but the tax assessor didn’t catch on to all of those and based our new tax on approx 180,000). Our realtor thinks we need to go down to 219,000 even though the appraisal said 230,000. Can we just drop it down to 207,000 (10 % of CFMV) immediately and still be ok?
You have had this property on the market for quite some time! Have you had any offers? Problem is that if you just drop it to $207k immediately they will likely hassle you and rereview “forever”. Better to give it 2-3 more weeks of progressive price drops DOCUMENTING ACTIVITY like a mad dog.
- Is the PFMV and CFMV more important to you because you are trying get cash from HAP after they calculate your 10% contribution? *If so they will look at you even closer. If you are not getting anything beyond 100% mortgage payoff slightly less strict except it still needs to show you did the best you could to save the government money.
-What has been the showing activity at $249k? Document it well. If you are on automated lockboxes and it has been shown Pennie can pull the box activity off line.
- What is the market like from $200k to $250k? How many homes and average market time to sell for that price range (absorption rate)?
-Contact any agents who have shown it in the last 3 months and document feedback. Hope they all say, “nice place but the price is too high”. ASk what they think price should be and put in notes.
**From what you have said, remembering I am not in your area and my whole market is much different this is were I’d need to run it with Pennie, I am just going by HAP criteria as I know it. I would drop it to $230k/229k immediately. You have way too much market time and need drastic change. I would do this for 1 week to show you tried at HAP CFMV. If there are no showings or some showings but no offers drop price again in 1 week. If there is a lot of activity, you may need to wait to drop price to give opportunity for people to decide to make offer. Likely there will be limited activity if it is as you say) drop to $224k for week 2. If week 2 brings limited showings but no offers (or no showings)…Come week 3 drop to $219k, etc. You don’t want to run out of room financially to give closing costs within the price if that is common in your area. Remember- you can’t give any “repairs”. Hope this helps.
HAP has scheduled our closing for 14 Jan
Also – there was an article on HAP in the air force times yesterday
Thanks Denise… I spoke to Tashawna a little over a week ago and that is what she told me about closing costs/realtor fees. It’s a bit disheartening since she is a processor and handling my file. I just can’t afford all those costs.
Also does anyone know if gov aquisitions are still on hold?
JP I hope that all goes well and smoothly. Keep in touch and let us know how it all turns out. This has to have a happy ending somewhere along the way. Have a blessed holiday and hope to hear great news from everyone soon.
Denise sorry about getting your services mixed up. It must be my old age. Hopefully the letter will be waiting when we return home-if we don’t get stuck in all of this snow!!!!!Talk soon.
Karen
Karen – I will post as I go along – I hope it all goes smoothly too. I’m afraid to believe it until I see it.
I hope everyone has a very merry christmas
Hello to ALL, I’m reaching out and need some assistance. I’ve recently put in my application for HAP in Savannah, but was disapproved.
I meet all the guidelines, purchased in 12/05 sold 11/08, primary residence, and had to move due to PCS. I submitted all paperwork plus more than what they originally asked for. I almost got through the Appraisal Department…but they stated they needed a County Decline…something they said they had to pay for, from the county that the property was ‘SOLD” in (Jefferson County, New York..Ft. Drum).
Even though the purchase contract, appraisal, approved buyer’s loan and HUDs (when purchased and when sold) justify my loss. I sent them the County information from the New York State Association of Realtors and they used that to reach their decision. I was being proactive, but got blindsided about this County Decline. Can someone explain the reason behind the county decline? Is the county decline a new step and is it staying around? I don’t understand why that is a factor, when your trying to sell the home before you PCS. I actually had the home on the market for 6 months and had to leave, and pay the mortgage while at my new duty station. They stated the County decline must be at 10% loss, between date purchased and date sold. Another question…why even start process if the County Decline is a deciding factor. It seems, it should be eliminated or a list brought forward stating which counties eligible for the benefits, because alot of people will loss out on the assistance and/or time wasted at the 3x HAP offices.
Thank YOU.
Hi Rich and welcome to our HAPless site. I will try to answer your question.
The county decline has always been a factor but we think that it is being rethought as we speak. The problem, as explained to me by Don Chapman from Washington DC, is that not all counties have reported figures for HAP to use. There are over 3000 counties in the US but only about 20% has reportable figures that they are able to use. So if you have information that counters what you are being told, send that in to your HAP office. They will use it. Be proactive and do your research. Many of us here have been in your situation and have been able to get our homes accepted because of our research.
Due to the above problem there is thought that this requirement will be taken away and only the 10% personal loss will be in affect. This was one of the issues that was being decided at the big meeting in Washington DC several weeks ago. I don’t think they are going to release any information until the new rules are published in January.
This program will be great once it starts to help people. But because all the rules were either changed or are being changed it has been a heartache to deal with. Districts are telling people that they will be able to close in the next few weeks. I have my doubts as the lawyers are still at a stand still as to how government acquisition will take place.
On the unfortunate side not all people are going to be helped. Some will not meet the cutoff dates or the 10% loss but the program will help some of us. I think they had good intentions but it is proving to be a long, hard road.
Rich, I hope that you are able to work this out. If I can help please let me know. I like to do research and have the time right now to help. We are in this together as military families always are. Blessings to your family during this holiday times.
Karen
Rich,
The initial decline of benefits is pretty common. From what I read recently, well over 50% of those applying are denied initially. We too found ourselves at the receiving end of this news. My advice; hound the living hell out of your HAP advisor with information that goes against their numbers.
HAP uses a program called Corps Logic to reach the figure they came up with for your county decline. We were told that our county decline was only 8% and that we were ineligible. I called and sent in several emails with data that I pulled from zillow.com, trulia.com and numbers that my realtor provided that showed our county at a 15-17% decline.
It took a few weeks, but they finally caved, accepted our numbers and approved our application. It’s been a long, slow process, but we’re moving forward at this point. Do not give up at this point. Continue to shove whatever data you have that goes against their information down their throats.
If that doesn’t work, take comfort in what Karen mentioned in the reply above mine. I was also told by my rep that they are in the process of doing away with the 10% county decline requirement. It was disqualifying way too many people.
District updates…
Savannah is processing government acquisitions and making payment. Yes, it has finally been confirmed from the top they have been doing them a few at a time since Thanksgiving week. It seems their leadership was willing to take chances with some items Sacramento was not so confident about in the contracts and process. This district seems to have the most challenges (by comment of members working with them) over what is covered and what is not when it comes to closing costs, warranties, improvements, etc. The environment continues to change.
Fort Worth is also processing Government acquisitions for payment. There are way less applications there and some major issues with most applicants making the “10% County area decline” criteria. They recently received an update on stats that should help some people. Fortunately, this issue should be resolved in a major way by being changed to “10% personal loss” when the final rules come out. If you have been denied in this district and your CFMV is 10% or more difference from your PFMV you will want to check in with them again.
Sacramento…government acquisitions are being “prepped” for processing daily but still waiting on title and contract approval from the District’s Attorney. So…still no government acquisitions as yet from Sacramento. Processors will be out of the gate like a shot when the Attorneys finally give the go. We sent over a different type of Title ploicy today for my friend Ralph. Offer letter to come any moment now- just not confident enough to hold my breath yet…!
Is there any word on whether the eligibility based on the conforming loan limit will be changed with the final rule? Our purchase price in 2005 exceeded the limit by $13K. Savannah seemed to elude that it may change (in Jan).
We received our offer letter today and it states that we can close in 45-60 days!!!!
That would make it one year since the program began to finnally pay off. Don’t get me wrong I am happy as can be. It is just how do I accept an offer if I don’t know what it is? How much do I have to come to the table with other than my taxes and insurance? So I am not being ungratefull for I am very happy that an end is in site.
I guess I just look at it as feeling incomplete. I did write back to the person that sent the offer and asked her for clarification as well as numbers.
Hope we continue to hear more and more people are getting the offer letters and moving forward. To each of you here, may your families and you have a blessed Christmas and New Year. Please continue to let us know what is going on during each stage so that any questions that we may have can be answered here.
Karen
I have been told by OSD (no guarantee till Final Rule publishes on or about January 15th, 2010) that the max is going to increase to $729,750 (same as FHA). If your PFMV goes over that you will now be eligible for the program (previously you were disqualified) but you will have to come to the closing table with any amount above that.
3:00 p.m. Wednesday- I just hung up with HAP Sacramento. Sacramento District’s Attorney still has not approved any of the files submitted for government acquisition for payment. There is still hope someone may get good news for Christmas- they work till lunchtime tomorrow!
Hello all, I’m looking for some guidance concerning “forced retirement” with regards to HAP eligibility. I am unfortunately being medically discharged under Chap. 61 medical retirement (NOT a Wounded Warrior). I have fought the discharge from the beginning but it was inevitable. That said, is a medical retirement (against my will, mind you) counted as “forced retirement”? I am now 150k upside-down in my Tucson house and will be unable to pay it off when I eventually relocate for medical rehab. Thank you in advance for your help and Happy Holidays.
Received a letter from my contact in the benefits section in the Savannah office today. In it, she states that if we are pressing forward with a govt acquisition, they will pay out 75% of the PFMV plus improvements OR they will pay the first mortgage only, whichever is greater. For us, that means we are hung out to dry on the home improvements.
Is anyone else hearing something similiar? From reading the rules, I was under the the impression that they would pay for the first mortgage in its entirety plus improvements.
DJ,
I don’t know about medical retirements, but I have heard that if you retire before the statutory year limit, they don’t approve because in DoD’s view, if you choose to retire, DoD is not forcing you to move.
For a forced medical retirement, I would call and ask, but also be prepared to show why you need to move from Tuscon. I would think you would have to give documentation as to why you can not rehab in Tuscon after you retire (show them why you need to sell your house).
I have a friend who is in a similar spot, and he is trying to reach 30years before he gets forced out.
Shane, from what I understand is that they will pay for your first mortgage or will pay 90% of your original purchase price plus any improvements. The only time that there was a 75% payoff was in the original rules (if the government bought your house because you were unable to sell it) but that no longer applies to the PCS rules. You MUST have a buyer lined up before HAP will even look at your paperwork. I would ask your contact where they are getting the 75% figure because that does not apply to us anymore.
The rule below is what now applies to the PCS moves. Even though it is still worded as “unable to sell” when the new rules in the register comes out in January they will have changed it to say “once you have a buyer”.
a) General Benefits: (1) If an applicant is unable to sell the primary residence after demonstrating reasonable efforts to sell ( see Definitions, §239.4(i) of this part), the Government may purchase the primary residence for the greater of:
(i) The applicable percentage (identified by applicant type in §239.5(a)(4)) of the PFMV of the primary residence, or
(ii) The total amount of the eligible mortgage(s) that remains outstanding.
As a PCS move this is what applies to us:
4) Applicable Percentage . (i) If an applicant is eligible under §239.6(a)(3) or (4) and sells the primary residence, the applicable percentage shall be 90% of the PFMV. In addition, closing costs incurred on the sale may be reimbursed.
But as I have said many times on this blog, things are going to change and will continue to change until the new laws are published. Remember that this program was not intended to put money in our pockets. It is there to help pay off our mortgages and applicable closing cost.
Hope this helps to clarify your question. If it does not let me know and I will have Denise answer it for you.
Blessings on the coming New Year to all of you here.
Karen
DJ,
Under the electronic code of federal regulations, it is not only wounded warriors that are being considered under the HAP rules but also those that are ill. When did your problems start that are getting you a medical discharge? What is your disability rating? And are you having to relocate because of your illness? If you are not having to move then HAP is not going to help you. Read on:
1) Wounded, Injured, or Ill . (i) Members of the Armed Forces:
(A) Who receive a disability rating of 30% or more for an unfitting condition (using the Department of Veterans Affairs Schedule for Ratings Disabilities),
or
who are eligible for Service member’s Group Life Insurance Traumatic Injury Protection Program,
or
whose treating physician (in a grade of at least captain in the Navy or Coast Guard or colonel in Army or Air Force) certifies that the member is likely, by a preponderance of the evidence, to receive a disability rating of 30% or more for an unfitting condition (using the Department of Veterans Affairs Schedule for Ratings Disabilities) for wounds, injuries, or illness incurred in the line of duty while deployed, on or after September 11, 2001 and
(B) Who are reassigned in furtherance of medical treatment or rehabilitation, or due to retirement in connection with such disability, and
(C)For both military and civilian applicants there must be a need to relocate from the primary residence in furtherance of medical treatment, rehabilitation, or due to medical retirement resulting from the wound, injury, or illness, and a need to market the primary residence for sale due to the wound, injury or illness. (For example, the need to be closer to a hospital or a family member caregiver or the need to find work more accommodating to the disability.)
Here is the website for the VA ratings disabilities. http://www.disabled-world.com/artman/publish/va-disability-benefits.shtml
Good luck.
New information on the HAP website, not sure if you all saw. They have taken out the 2012 date and replaced it with 2010.
2. Reassignment ordered between 1 February 2006 and 30 September 2010.
Karen
Shane- Ask for a Supervisor! I would love to see that letter. Either you are misinterpreting what your benefits advisor said, or that advisor needs some advising! I think it is the latter based on most of your previous statements from the advisor about closing costs, agent fees, buyer closing costs, etc. You have a good grasp of the program. If this person is telling you so much bad gouge, imagine how many other people they may be affecting. Since you mention the letter stated 75%…I think it is the “advisor” needs help understanding the rules, unless that has changed in the last week. The “75% if the government buys your house” is NON-EXISTENT in Expanded HAP according to every advisor I have ever talked to. You must find a Buyer if you are PCS or BRAC. That is where 75% would have come into play. You have found a Buyer. Only ones who may not have to find Buyer are Wounded Warrior and Surviving Spouse- if circumstances warrant. They still have to try to find buyer and meet the 120 days plus some other stipulations. It is ALWAYS best to find the buyer.
For PCS- the options are:
1) 100% of your current outstanding mortgage through “ACQUISITION”. You don’t get any money for improvements or money down back to you in this case because in all likelihood- those contributions on your part of do not meet the 10% or more of PFMV threshold.
2) 90% of value through “REIMBURSEMENT”. In such case you have to come up with any money needed to close the deal. Outstanding mortgage is usually LESS than that 90% number. Or, you have lots of improvements that went cash out of pocket, or put 10% or more down. Reimbursement method needs to be used if you are trying to recoup any monies spent beyond the 10% PCS required contribution. Essentially, if you don’t already have savings enough, you have to find/borrow more money to close and bridge the time gap until HAP pays you back.
No, you don’t get a 100% of the mortgage through acquisition payoff and still get any money back for improvements nearest I have been able to tell. It’s because the PFMV plus improvements factored with the CFMV and outstanding mortgages doesn’t typically get you over 10% contribution. Remember, the program is meant to help the majority of members out of trouble, but clearly states it is not meant to “make you whole” for all that you contributed out of pocket.
DJ- Rob S. gave some good info. Some of this may depend on eact circumstances of discharge, where your home of record is and why you are selling in Tucson. I know you are Fort Worth District. For a “sanity check” on qualifications I suggest you call HAP Sacramento and run your situation by Ty or Janice. Main number 800-811-5532.
Thanks for all the information on this site! I haven’t really posted but I wanted to share my situation. I am doing a government acquisition on my house (I’m too upside down to sell on my own and be reimbursed). I had all the ducks in a row and a buyer for my house and was told by the Sacramento district office to set a closing date early in December.
Well, my HAP approved closing date came and went and the Sacramento office told me government acquisitions were “on hold” because of a legal concern over the forms used to acquire the property. After my original closing date went by my caseworker told me that I would definitely be able to close by the end of December. Now it’s the end of December with no end in sight!
The buyers for my house want to move in January, so this is a real problem. The worst of it is the other Army Corp of Engineers district’s legal counsel apparently had no problem with the forms and the other districts are publishing these very same claims!
At this point I would advise anyone who has been told by the Sacramento district to set a closing date 30 to 45 days out to call their Congresswoman/man and press the Sacramento district to stop holding this program up, or like me they may be constantly reassured they can close any day yet days go by with absolutely no progress on the issue and assured closing dates coming and going.
It is unbelievable that military members who have waited so long for this program and who have relied on it, leaving their houses empty to sell, have to wait longer because people are still not prepared to implement a program that has been in the works for months! Meanwhile, some people will certainly lose their buyers over this because their buyers can’t wait while the Sacramento district takes the time to figure out how to process claims the other districts are already processing. It is frankly unbelievable and a real hardship for military to keep paying the mortgages on empty houses when we’ve already been waiting for months.
Marie welcome to the board and I am sorry that you are in the Sacramento district. Yes the lawyers are holding up all government acquisitons coming out of there and yet the other districts are pressing forward. It is so frustrating that not all districts are on the same page.
Would your buyers agree to rent from you while they wait for Sacramento to move on this? There are many of us here that have done that. My buyer moved in just prior to Thanksgiving and he understands that we are waiting for HAP to come to the table. Being military himself he understands that it is not our fault but the bureucracy of it all. I excepted the HAP offer on December 24th and we have set a closing date for early Feb 2010. Now we wait and see if that comes to past.
JP is due to close on Jan 15th and we are all holding our breath to see if that comes true. As Denise has said, Sacramento refuses to move on their contracts until they feel comfortable with the wording. I hope that they can come to a decision soon as it is affecting so many good people out there.
When I contacted my senators and congressmen, throughout this whole ordeal, I would receive “thanks for your concern” letters back from them and then nothing. I found out that each time I wrote to an official it would end up on Don Chapman’s desk in Washington DC for him to deal with, taking him away from his real job of getting HAP pushed through. So I am not sure what good it does to contact our reps in congress.
I pray that we hear good news from all the districts soon. What a blessed New Year it would be!!!!
Karen
Just heard from a realtor in Virginia that she closed on her HAP client several hours ago through the Savannah district. Good news when we hear about specific people getting through this process!!!! Lets keep bringing the good news to all of us.
Karen
Does anybody know the ground truth on short sales? I’ve heard that the HAP will treat them just like any private sale and pay the 90% of PFMV plus closing costs. Is that true? If so, am I under any government-imposed obligation to use the money to repay the forgiven amount to the bank?
We’re still due to close on 14 Jan – however apparently we need a new contract and so far the person at HAP handling that has not responded, hoping she’s just on leave for the holidays or something.
Vinnyny, I took the below from another HAP forum. I’m not sure if it makes since but it may help you to understand how one district handled a short sale.
These figures are not accurate and are for illustration purposes only. Scenario reflects what happened in my short sale situation.
$275,000 Principal of Loan on Closing
– 190,000 amount paid towards prin from HUD1
85,000 Dificiency
$325,000 Amount paid for Home off HUD 1
325,000×95% BRAC on installation on11 May 05
308, 750
-200,000, home sold for
108,750 Brac Entitlement
-85,000 Written off by Bank
23,750 amount due me
I am contending that this 85K should be paid to the Bank to show account settled and not reported as a short sale which is not good for my credit.
Any feedback?
JP why another contract?
Karen
I do know that if you do a short sale and have a VA loan then until you pay back the amount forgiven you cannot ever use the VA loan again.
Karen
Angela:
If I read that correctly, it’s saying that the bank received none of the $85k deficiency (the gov’t kept that money) and the SM received the difference of $23,750. So, the bank got hosed for $85K AND the SM’s credit still took a short sale hit. Something seems wrong with that–either the gov’t should pay off the bank and fix the SM’s credit or give him the total amount of the benefit and let him decide whether or not to pay off the bank. When I spoke with my bank, they told me that my credit would be destroyed whether or not I paid them in full.
If anyone has other good HAP forums, please share the links. This is a great forum, but I’m trying to get as much good info as possible.
vinnyny,
That is the way I read it as well. The one I took my previous msg from is http://www.moresam.net/Forum/afv/topicsview/aff/7.aspx. You may or may not find some additional information there. The moaa forum is very informative and updated as well.
Have you already done a short sale? If not, I would proceed with caution and try if you can to obtain a short term loan to cover you at closing until you are reimbursed by ACE. As I understand it, any bank can come after you for years to come unless the agreement between you and the bank specifically states that you are forgiven for repaying any “forgiven debt.” I would contact a lawyer and not rely upon what your realtor or bank are stating.
ALL,
HAS ANYONE HEARD ANYTHING ABOUT THE CHANGE FROM 10% COUNTY DECLINE CHANGING TO THE 10% PERSONAL LOSS? Does anyone know where the decision is now in the process?
Thanks,
Rich
-Still pressing forward
VinnyNY – We are in the exact same situation!! The Federal Register states that the short sale is to be treated as a private sale (and we thought the same as you – it would then be our decision to work something out with the bank, or to keep the money and have it to essentially help cover all he extra cost and fees we will (and already have) encountered due to the credit being destroyed and also to reemburse our down payment money.
However, when we submited our packet (per their check list), they requested we fill out an additional “new” form which asked about how much the bank forgave. This concerns me, as we will end up getting nothing back – including our downpayment money, because as we all now know, you can’t short sale without missing payments, so we had to stop payments just to try to sell the house which means that fees from the bank for non-payment added up to almost the purchase price of the house (thus eating way into our downpayment). Our house was in FL and it took a year to get it sold at a 48% loss.
Don’t they have to stick to their guidelines that are printed – and the formula provided? I did notice that they adjusted their slides to not include short sales on their private sale info slide – so that also seems like they’re changing it up.
At this point we’ll get nothing back, but be out the cost of sending all this stuff into HAP, thus HAP costing us money. Go figure.
We are both in he Savannah district, so please keep posting on what you find out, and I will do the same. Our packet is now in benefits (but oddly it says aquisition benefits or something to that affect on our letter, so I hope it’s in the correct department).
Kelli
VinneyNY – I’m sure you’ve probably already read this, but I just wanted to point out section (c) (1). It specifically states that if the funds allotted by the benefit formula exceed what is owed to the bank (and in an already sold short sale, would be nothing if it’s forgiven), that the money is to be paid directly to the applicant.
A short sale will be treated as a private sale. If an applicant remains personally liable
for a deficiency between the outstanding mortgage and the sale price, the amount of this
11
deficiency may be included in the benefit, provided that the total amount of the benefit does not
exceed the difference between 95 percent of the PFMV and the sales price.
(c) Payment of Benefits. (1) Private Sale: Where a benefit payment exceeds funds
required to clear the mortgage and pay closing costs, benefit is paid directly to the applicant.
Karen – apparently two contracts are needed, one between me/govt and one between govt/buyer as there will be two ‘settlements’ same day
This has been a great website especially since people are finally having some success getting through the HAP process. My HAP package finally made it to the benefits department this week (Savannah district). My tenets moved out on Dec 1st and I’m broke from paying 10 months of 2 mortgages last year…now benefits is telling me that there is no closing dates available until at least Feb. This is aggravating since I’ve done everything that was asked but still have to wait because they only have 2 people doing closings. I’m happy that I’m through the process but I may need to take out a loan so I can stay current on my mortgage and then take out a loan to cover my HAP loss. Sorry about then venting I just can’t wait for this nightmare to be over! Happy New Years to everyone and I hope that the HAP process works out for us all!
Thanks Angela. I haven’t done the short sale yet because I’m still waiting for the offer. My realtor is confident that it will be arriving in the next few days.
I won’t even try to do a regular sale with a loan to make up the shortage because I can’t count on the HAP. As it stands now, my properties still aren’t eligible because of the max purchase price restriction. However, I’ve heard that the rule is about to change. My credit is already shot because I stopped paying the mortgage after 42 months. When I had a cash offer back in September, the banks told me that they wouldn’t even talk to me about a short sale until I was in arrears by 90 days (how stupid is that?). I’m hoping that HAP will approve my “high priced” house and treat the short sale like a regular private sale. If I’m going to lose my credit, at least I should be able to pay off some of the $140K I spent trying to keep the mortgage current (not to mention my $45K down payment and closing costs or the $25K in improvements I made).
Jp,yes thats right there are two contracts. One where the government acquires your home and then the second one is when they turn around and sell it to your buyer. When did you see the figures of how much money you had to bring to the table with you?
karen
Rich the new rulling should be sometime this month when they publish the rules. The skuttlebutt we have heard is that the county decline will be eliminated and only leave the 10% personal loss. Too many of the counties in the US do not have values for the DOD to use. Hope that we hear soon that this has been done away with.
Karen
Karen and I are both moderators on the VRSam site. It is a great place for information on quite a few topics.
I have a client who went short sale because they would have been bankrupt waiting any longer for HAP. No exaggeration. We are just in the process of seeing what, if anything will be done to help them clear their name and credit. I believe there should be a letter that goes out from HAP requesting credit companies clear any lates and show all HAP eligible members as “paid in full as ageed- STIMULUS” for any short sale or foreclosure that was a direct result of delay in this program. If HAP would have started paying when approved by Congress (February 2009)- most would never have had a late. HAP is supposed to help pay off any remaining indebtedness to the lenders if you short sold- if any note you carried was otherwise qualified by program guidelines. They are not going to directly give the Service Member the money to send on to the bank- especially if the debt has already been released. The money would be paid directly to the lender on member’s behalf. For many of those who already short sold the challenge is going to be that while you have not been asked to repay anything at this point from the mortgages; you are stuck with mountains of debt accrued on credit cards and other loans trying to stay current. If the program was reimbursing for expenses accrued from application to payout, as it did under the old program- many would be pretty well cleared. But that program change is going to leave folks in a bad place due to all the delays on the government’s part.
Everyone needs to understand about short sales is there are “recourse” and “non-recourse” loans. Each state has different laws on what a lender can collect after they “release a lien” for a person to do a short sale. Plenty of info on the web about this. Just because they release the lien for you to sell the property does NOT mean they have fully released you of the debt. Usually, if it is a purchase money loan- which is a loan taken when you first bought the house, it is non-recourse. That would mean they have to forgive it and can’t come back and ask for it. Most refinanced mortgages/HELOCs are recourse loans. So they can come after you for the money later if they do not agree to full forgiveness of debt at approval of the time of short sale. There are so many little details to look at in the case of a short sale. Short sale is still better in 99% of the cases then just foreclosing. There is a lot of misinformation out on this topic from Sea Lawyers. Beware. Best thing to do is go see base legal as soon as you have signs of trouble. The counsel is free, they can direct you to other resources, and the documented visit to a military resource should help protect you if you run into issues with your security clearance and debt later. The base attorneys are also receiving plenty of training on HAP.
Denise
Thanks for all the updates. I have not seen a lot of information out there concerning Short Sales and HAP.
My understanding was that The HAP program is designed to protect those military personnel who qualify for the program, and to preserve their credit. The parameters of the program indicate that a qualifying military member who participates in the HAP program, and who does a short sale, is protected from negative credit reporting.
I did a short sale that finally closed in Nov. It was either that or end up bankrupt My credit score went from a 800 to a 630. I am not even too concerned about the credit score as much as the three year wait to qualify for another mortgage.
DJ- Just wondering if you called Ty or Janice in Sacramento and ran your potential for Wounded Warrior status (Ill) by them as I suggested. They can also update you on the maximum PFMV and 10% rules. My understanding is Members qualify for Wounded Warrior status if 1) became disabled/injured/ill after 9/11/2001 and 2) were injured or began to notice symptoms of illness while deployed. The definition of deployed for these cases is not what we would think. So, you and anyone with any question on this really should check into it further.
Marie- My client Ralph is in your same situation with Sacramento. We have been in escrow since late April ’09 with the Buyer renting since July. We were released by HAP Nov 10th (week after tax fix) to set a close date of Dec 16th. Set everything in motion then could not close due to lack of Title approval by the Attorney- also there were concerns by the Attorney about properties with HOAs and how to handle the required “government inspection”. I was told on Wednesday, 12/30, that the HOA issues are solved and sent a form for a government employee to do an inspection on the property. Will be sending this in on Monday and will post again if anything changes. All we will need is Attorney to approve so Ralph can be issued his offer letter for signature. Then Ralph returns his government purchase contract and the Buyer returns his. Government payoff check can supposedly be issued within 24 hours of all these docs being returned. We are looking forward to Sacramento proving this out. It has been a long road.
Kelli:
Sorry I didn’t respond to your posts earlier, but I somehow missed them. I’ve been holding my HAP submission since April because I have two houses that might qualify if they eliminate the purchase price restriction. The Sacramento office recommended that I wait because one case number in the system will knock out the other. So, I don’t know which house to submit.
I can’t submit until OSD gets their act together enough to publish concrete final rules. If the SecDef’s underlings had merely implemented the legislation as written, I probably would still have perfect credit (800+) and wouldn’t have $100K in credit card debt I used to keep the ship afloat.
My VA house is rented at a loss of $1200 monthly, but it cost alot more than my AZ house (giving it a potentially higher HAP payout). My AZ house has been vacant for more than 3.5 years and I finally stopped paying the mortgage because the banks wouldn’t even talk to me until I was 90 days in arrears. Now they call me several times a day–not to work on a modification, but to collect a debt.
If “augmentation” were still a real possibility, then I could have sold my AZ house twice now. I just couldn’t come up with another $80K to make the deals work. IF HAP finally decides to treat short sales as a regular private sale and pay the full benefit to me, then I’ll short sell the AZ house and file the HAP application. If my credit is going to be destroyed anyway, I feel like I should get to use the benefit to pay my other debts.
By the way, the folks at OSD told me that HAP has no provisions for restoring one’s credit. I thought the purpose of HAP was to alleviate suffering among servicemembers, not just another bailout for the banks!
The challenge with HAP is that that protecting Member’s credit will work best for those who were able to keep up with their payments and not accrue mounds of additional debt while waiting HAP processing. Old HAP rules helped people in this situation by providing reimbursements. Current rules do not have this provision as they are trying to reserve that money to help more people. Technically, most HAP beneficiaries are “short selling” (sale price less than mortgage balance and they do not have the money to pay the difference) but because government acquisition pays off mortgage balance in full at the time of sale- the bank gets all their money at the time of close. Thus, in theory, there should not ever be a hit to the seller’s credit. For those who short sell and later try to get HAP to help clean up the loose ends- it will be a whole other story. They will already have had the hits.
I am not a credit expert and would LOVE for someone to help me out with this! My understanding of it at the moment is that it will be up to the bank whether they report it “paid in full as agreed”. I say that with some question in tone because the money paid is from a 3rd party. The bank may report it in another way which would cause a negative impact just because it was not the seller directly. I do not see that as fair, but I do not make the rules, I only tell you what I have heard so far.
If the bank agreed to close short sale before HAP can acquire then you get that score hit unless you can negotiate otherwise with the lender. My contention is that there should be some sort of letter that should be done by HAP to go to the credit reporting agencies for HAP qualified beneficiaries. It should give specific request to delete any negative items reported against the Service Member since the programbecame available. With the help of some knowledgeable people, I would be happy to draft a letter and send it to the appropriate person to request it go into use at HAP. If you know anyone with in depth knowledge of credit reporting please bring them on board for input on this!
BTW- According to Home Services Lending representative current FHA guidelines say it is 2 years until FHA will give a new loan to someone with a short sale reported. That is with all other credit payments being timely and positive. The qualifying score is also pretty low. 600 minimum at the moment. I don’t have curren VA criteria offhand, but I will ask.
Hi, all. Denise just sent me to this site. Too many posts for me to go back and look through. I will tell you that I am the Virginia realtor that Karen mentioned about getting a HAP deal closed. Yes, that is correct. I got one done! I also have a 2nd approval on one, but it looks like it will going short sale instead. I am located in the Savannah district. They are trying to get their act together. Please e-mail me at sdwardwell@comcast.net if you have any questions. I will try to get back here this week to see if anyone has any questions.
Everyone have a good week!
Denise et al,
Thank you for your guidance concerning my medical discharge. As for further information, it is looking like I will be medically retired at 40% disability (50% VA). The question I have is that I will technically not be considered a “Wounded Warrior” as per service regulations. There are completely different rules to qualify for “Wounded Warrior” status that is beyond simply qualifying for medical retirement. As it stands, I qualify for the latter, but not the former.
That said, I am trying to make sure that a medical retirement coupled with my PCS back to my Home of Record (for medical rehab) would qualify me for the HAP, even though I will not be considered Wounded Warrior. My particular situation (and I’m sure there are many like me) is not spelled out within the current code. The code speaks of Wounded Warrior eligibility and Forced Retirement. No where is there guidance concerning regular CH61 medical retirement.
Thanks again for you help!
I contacted HAP today to see what the status of our closing was and this was the reply:
Colonel Davis,
We have tentatively scheduled your closing for January 29, 2010. We are currently waiting on Title Work to be completed and then your Realty Specialist, Mrs. Shannon Anthony will be in touch with you to let you know more about the funding/calculations regarding your file.
Our fingers are crossed for JP’s scheduled closing of 1/15/09.
karen
VinneyNY – My posts took a while to post. It said they had to be approved (I’m guessing it’s because I haven’t posed on her before).
I think you’re exactly right that the HAP program is just turning out to be another stimulus for the banks. HAP is making sure they’re getting their money, and doesn’t care about the service member. I thought this program was “for” the service members???
Your statement, “IF HAP finally decides to treat short sales as a regular private sale and pay the full benefit to me…” is exactly what the federal register says they’re suppose to do! That’s why I don’t understand why they’re not doing it??!!
This is what is stated in the 32 CFR Final Rules:
“(2) A short sale will be treated as a private sale. If an applicant remains personally liable for a deficiency between the outstanding mortgage and the sale price, the amount of this deficiency may be included in the benefit, provided that the total amount of the benefit does not exceed the difference between 95 percent of the PFMV and the sales price.”
“(c) Payment of Benefits. (1) Private Sale: Where a benefit payment exceeds funds required to clear the mortgage and pay closing costs, benefit is paid directly to the applicant.”
The HAP site specifies the formula for Private Sales: Private Sale (Mil.): Reimburse: 90% of purchase price – sale price + closing costs
So given that information, it appears that according to final rules that the money “is” suppose to be provided to the service member who has done a short sale – when no money is owed the bank (instead of not giving it to the service member OR the bank).
also, if a certain formula is to be used in a certain sale situation, it shouldn’t change based on whether the bank or the service member will benefit more. Ex. In previous comments, it appears that HAP will figure the benefit just as the federal register states so long as the bank is owed money. But, if the bank isn’t owed money, then suddenly there’s a subtraction of what the bank wrote off, thus changing the formula, and changing the rules that any benefit that exceeds what is required to pay off the loan is to be paid to the service member.
I don’t see anywhere in the guidelines where a formula is given, or a statement is made, that says short sales are to be treated differently in any way from a private sale. and actually quite the contrary, it’s stating that they ARE suppose to be treated the same. So why aren’t they? I understand that several of you have heard information from HAP to the contract of the above information. Do you happen to know where the guidelines are that they’re following to get these other short sale calculations?
Kelli
Kelli, welcome to the HAP forum. You bring up many valid points and raise more questions than answers right now. Until the final rules from the registry are finalized it is all up in the air. Hopefully, and that is with all fingers crossed, that will happen within the next few weeks. Then our questions will be answered………hopefully.
Karen
Hi Karen. So the guidelines that are posted now aren’t what they’re following? I guess I’m confused. I know that there are certain things in the air, but I thought what was published was what was being followed? I would hope that changes wouldn’t be made to be punitive to the service member, but to help them (such as raising the housing price limits). Ugh….so much I’m not clear on.
Also, since claims have been paid out for short sales, aren’t they following the current set of guidelines that are posted? If there is another set of guidelines besides the federal register ones I’d be appreciative of any information.
Crossing my fingers for everyone!
Kelli they are suppose to go by what is published right now. But as we have seen with Sacramento they are unwilling to sign off on any of the government acquisitions as written. I hope that once the new rules are published that those questions will be answered. I know that it is confusing and hard to swallow somes times. Hopefully with the new, revised rules coming out soon, that they will help more of our service members.
Karen
They are mostly following what is posted in the Interim Rule until Final Rule publishes. Most widely influencing change is the straight 10% personal loss (vs. community or parish AND personal). This helps about 50% more people qualify. Next biggest items are raise in price cap to $729k, and additional closing costs covered; including Homeowner Association fees which they were not going to pay at first for acquisitions. Now they will.
Kelli- Your post item (2) about short sale treated as a private sale does clearly state HAP will pay- but only funds that are program qualified by the 90% formula (PCS) that “remain as a deficiency” after the short sale. If monies have been “forgiven” by the lender, they no longer “remain as a deficiency”- thus will not be paid by HAP (to the Service member to help cover debts or otherwise). If the lender required an unsecured note/loan be carried to close the short sale- that would be a “remaining deficiency”. Then HAP would forward the funds to pay off the remaining deficiency to the lender on the member’s behalf. I vote with you all that if the bank could be contacted and would report you as “paid as agreed” and delete late reporting for a partial or full reimbursement of the $$ written off- it should be done. Unfortunately that is not how it is set up in the rules. Grrr.
Item (c) for private sale is referencing if the PCS Service member beneficiary has already met the 10% personal contribution threshold and there is benefit money left once all debts on property have been paid. For example-
PFMV= Purchased property for $200,000 in 2004
Put down 20% cash= $40,000
Mortgage was $160,000
CFMV Property now worth $170k
HAP benefit is $180,000 (90% of PFMV) plus realtor fees and closing costs ($10,200+appx $5,000= $15,200).
$180,000 benefit -160,000 mortgage payoff= Military seller gets to put $20,000 back into their pocket via HAP. It is not as much as the $40k they put down, but better than the $10,000 they got in gross CFMV without HAP, which would have been more than eaten up by Realtor fees and closing costs without HAP.
As I mentioned numerous times, the original program had a provision to reimburse Sellers the expenses incurred while waiting application processing. For simple example- Program came out in February 2009. Your house is vacant and you apply February. House sitting empty costs you $2,000 per month. Your application doesn’t get processed for closing under acquisition till February 2010. Government would pay you $2,000 x 12= $24,000 towards the expenses you incurred while waiting. Then you use that money to pay off any credit/debt taken out to cover expenses while waiting. If you think it unfair this provision was taken out of program- you need to post a comment on the Federal Register before comments close on February 15th. I have posted a comment already. That is the best thing anyone can do at this point to encourage SecDef to include that provision so members will get money to help pay debts incurred while waiting for this program to begin to pay out. There is no provision to reimburse anyone the expenses incurred while waiting for the program to come to fruition. It is very unfortunate. That is why many people short sold or foreclosed. They didn’t have carrying costs to make it this far.
One of my clients closed short sale on the day the tax legislation passed. Their carrying costs were over $5,000 a month out of pocket. They went almost bankrupt trying to hold out for HAP and stay current. They had 4 little children and were on their 2nd qualified transfer. Yes, they would love to have $50,000 reimbursement for that 10 months of waiting to help pay down their debt, or the roughly $200,000 HAP was supposed to pay out on their behalf (fortunately forgiven by their lenders). Return of the 200 points lost in credit score and late hits cleared would also be appreciated. However, based on the rules, they will not be getting any help with anything. Big bummer. I am trying to at least find a way to get help with the credit hits. Nobody is alone in this. We just have to stick together and try to find best remedies for each person.
Denise – Thanks for your reply! Where did you find this clarification detail of the formula – “only funds that are program qualified by the 90% formula (PCS) that “remain as a deficiency” after the short sale. If monies have been “forgiven” by the lender, they no longer “remain as a deficiency”-
The bad thing is, some banks aren’t requiring promissary notes, but reserve the right to collect on the funds.
Thanks,
Kelli
Denise – where do we go to post a comment on the Federal Register
SACRAMENTO District has finally processed its first government acquisition! I am in the process of updating my website to include sample offer letters and entitlement letters. Will let you know when that is running if you want to see what to expect.
To post comments for the Rule-
Go to: http://www.regulations.gov
At keyword or ID type in the docket number: DoD-2009-os-0090
You can also check the block: Open for Comment/Submission
Hit Search
Should bring you to the most recent comments on HAP
If you have made your HAP application then short sell…you need to be very cautious of the wording in the short sale approval letter. Lenders are purposefully vague in most cases. If you later find the lender is now coming after you for funds you thought were “forgiven”- then you let legal and HAP know. HAP should reopen your application and process you for deficiency assistance, as long as the deficiency was qualified for HAP entitlement in the first place (had it not appeared “forgiven”).
Dear Everybody (Karen, Denise, Rob S, others),
First, please let me say on behalf of many who are behind you chronologically in the HAP process, you all have provided such a valuable experience by the teamwork and support you have provided each other and everyone tracking this blog, while providing tremendously important information all along. We appreciate you!
I am just about to start the process of marketing the house for sale. I have been lucky to have tenants living there while I applied and was approved by the Sacramento office. Now that I’m getting ready to go for an offer, I am wondering if you can clarify a couple of points:
1. Sacramento said that only AFTER my offer comes in from a buyer do they do the appraisal. I was asking them how to ensure my selling price was in the correct 10% up/down zone. They said that I should allow market forces to determine the listing price. There has been some really specific communication on this blog about ensuring the buyer’s offer is within 10% of the HAP appraisal – how do you recommend setting the initial price, based on what you’ve learned? Simply matching it to what comps in the area are pricing at? Should I start at what I owe (much higher than market price) and move down from there? I also saw some language about the house needing to stay at an initial market listing price for a 30 day period before any lowering of the price. What do you think?
2. Can anyone see an issue with marketing the house while tenants are still in it, from the perspective of HAP rules? It seems like many on this blog have vacant properties, or are lucky enough to have potential buyers renting while awaiting closing. Are there any danger areas to stay away from that anyone has encountered which good planning could avoid?
3. I think I’m also confused on even the basic “govt acquisition” terms being used. Do I understand even this most basic info correctly? I perceive myself to be marketing the house for a sale, which I would call the “private sale” option (as opposed to govt acquisition). Once a buyer is located and offer made, then I submit to HAP, they appraise and review, they send word (like what Karen got on the proposed Jan 29th closing date) about when closing can occur, and then the sale goes to the other private party. The HAP applicant is reimbursed up to the level of 90% of original sale price. When I see “govt acquisition” it makes me think of the old provision from February about the govt only paying 75% of purchase price if you ‘sold to the govt’ vice 90% if you had a ‘private sale’. What am I mis-understanding?
ANY clarification, advice or corrections on what I have written above are welcomed. I think there are more people following this post than many of your realize, and we have had the luxury so far of having time to learn from your hard work. Thank you again, and I hope to hear some of your thoughts soon…
Sincerely,
Rory
I posted a sample entitlements letter and offer letter on my website Homeowner Asst Program page for all to see. http://www.theREAgent4me.com Think the trick is, HAP won’t send you an entitlements letter unless you really press them for it- that is my experience thus far. The letter states they have deemed you qualified for the program and what they intend to pay out on your behalf as benefit. It also indicates the required sale contract price for the property (calculated off AVM). This is the page you really want to see and assure is correct before you sign the offer letter.
Rory,
I think I can help answer your questions as I am in exactly the same boat and slightly farther along in the process. We are also working with the Sacramento District and all of what I am about to write was confirmed yesterday with one of the real estate processors at Sacramento yesterday (6 Jan).
Our home has had tenants since June of 2009 and we have a 1 year lease agreement that lasts until 31 May 2010. We contacted our tenants and advised them that we would be listing our home for sale in December. Since we wanted to honor the remaining lease, we advertised our home as only available for sale to an investment buyer that would keep the tenants in the home for the remainder of the lease. Showing the home has been difficult for our real estate agent as she has to give tenants advance notice each time. The tenants were initially uncooperative as their desire is to stay past the lease, but later cooperated when we told them it’s in their best interest for us to sell to an investor rather than have us terminate the lease at the end of the year and then sell to anyone that would buy – including non-investors. We got our first offer yesterday and hope to close sometime in March. The bottom line is that it is possible to market and get to a contract with a tenant in the home. We just ensured that the contract obligated the buyer to honor the lease to completion as a condition of closing.
Now for the HAP part. We are fortunate in that we can accomplish a private sale with HAP augmentation (terminology) in the PCS category. They way it was explained to me is that as long as your HAP benefit + the price of your home + any money you bring to closing (optional) exceeds the amount of outstanding debt on the home, you qualify for the private sale 90% PCS benefit. The HAP benefit is defined as 90% of the difference between purchase and sale price (including capital improvements) + covered closing costs. HAP needs all the application paperwork, the contract, loan payoff data, and completed HUD-1 in order to complete their work and eventually deposit your benefit money into the escrow account.
Hope this helps.
Thanks to all that have contributed – it’s been very informative!
JC
Rory welcome to our world. Let me try to clarify a few things for you. That which I cannot answer I will have Denise come on and answer them for you. I am not a realtor just a wife of a military member in the thick of things. Denise is a realtor (but she is also a spouse of a military member) and can address the more technical side of HAP and the realtor aspect too.
Government acquistion, as we know it today, is new. When you opt to do a Gov Acq you are still liable to find a buyer for your property. You find the buyer, HAP buys the property from you and turns around and sells it to the waiting buyer. The percentage, as they stand now and this is for PCS moves (we are waiting for final rules to be published within the next few weeks) will be that they pay you 90% of your home price (which is suppose to be what you paid for PMV) OR your current mortgage amount. The 10% decrease is so that you have a 10% loss to deal with. If you have alot of equity in the house or made many improvements then the 90% payoff value would be better. If you are upside down on your mortgage, meaning value of home is less than what you owe or are able to sell for then paying off your mortgage is better.
If you go for the private sale, this is where you have sold your home yourself already. You are now coming to HAP for help to make up partially what you lost. For these cases many of them are from sales several years ago. They have already sold and want to get some money back for their losses.
The new HAP does not aquire any property anymore. It is too costly to the government. So we have to find a buyer, and then HAP comes to the closing table ready to lend a hand to cover the shortfall.
I will ask Denise to address the first question you have about how to market the home.
I don’t understand how HAP expects you to know what to market your home for. We just kept dropping the price of our home until we had someone who wanted it. No, thats not right. We had to find someone that was willing to wait until HAP came on board. WE had several offers before that but because they were not able to or willing to wait for HAP to come to the table we lost them. In your case, it should be easier as HAP is now in place and ready to help. For those of us that have been waiting all these months it was harder.
We kept dropping the price and at the end point we had gone to low. But only by $400 and the buyer upped his price to meet what HAP said we had to have. It is not fair that you don’t know what that price is and hopefully with the new rules they will address that.
I hope that your sale goes smoothly and look forward to hearing about the process. Keep in touch and I will let Denise know that you have some questions.
Karen
Rory- Karen has answered the bulk of your questions spot on. When it comes to HAP most of the “definitions” of the terms like “Acquisition” and “Wounded Warrior” are not traditional dictionary definitions, or the same as previous or even other Veteran’s programs. To most laypeople, acquisition would mean Government just buys it from you and then they deal with selling it on their own. In HAP, Acquisition means the U.S. Government buys the property from HAP beneficiary, owns it for mere moments, and then sells it to the Buyer the Beneficiary (you) found. HAP is not currently equipped to own property, inventory, maintain and market for sale any homes other than Maine (BRAC). In essence the military member then absorbs all the carrying costs it takes until the home is sold. This works ok for people who are not yet transferred, or those who have amicable tenants who are paying enough rent to cover all property expenses. For other situations, like vacant homes, it is a real drag on member’s finances.
As discussed- Acquisition works best for those who have less than 10% of PFMV of their own money or repairs invested in the property. Most people using acquisition will be using the 100% of the outstanding mortgage balance payoff option. Private Sale is good for those who put 10% or more into the property and might get a few dollars BACK into their pocket by coming up with the money to close the sale and be reimbursed. The challenge is that most people don’t have the cash available to them to use the reimbursement option. These folks must acquire and are at the mercy of HAP until their payoffs can be processed.
On marketing for sale- most people when this program started put their homes on the market for what they needed to sell them for to walk away. AS you mentioned, learn by our experience. This is not realistic and certainly not necessary in most cases now that HAP has begun acquiring. Buyers only care what the true market value is on a property. That is what they want to pay. If they are not paying cash, it is all their lender will allow them to pay! So get yourself referred to a knowledgeable Realtor in your area for a market evaluation. If you need help finding one contact me on the backside. I have gotten AVM numbers on 7 HAP properties to date- 5 have market analysis and offer prices above the government’s automated value; 2 have automated values higher than current market. It seems AVM doesn’t really take upgrades and pools into consideration. However, the current market value/buyer offered price is still within 10% (below) the AVM, additional local information supports the value and so the government will still accept. You will have problems if you get outside that 10% difference- this is why Karen had to get her buyer to pay $400 more. It is a little technical but I hope I have explained it in a way that is easy to follow. Btw- in the real estate world there is a difference between a true appraisal (someone actually goes to the house or at least gets more specific data from local records) and the automated value. It is not HAP policy to readily volunteer the AVM. However, Sacramento can tell you the automated value on your property in less than 30 seconds- ask again and don’t take no for an answer.
Remember, I am not an attorney or an accountant. You should always consult those professionals before making any final moves. Your future depends on it. I am a great advocate of base legal services. I am a Realtor who has years of training in real estate and conducting transactions, so I can pretty easily recognize and address the issues that are property and program specific from that direction. I’ve been on the great HAP adventure right along with my fellow military family. I’ve learned what I know by experience and asking a LOT of questions!
JC- good gouge also. The situation with tenants in the property while selling depends a lot on how amicable they are, when the lease is up, etc. Most tenants are understanding of the owner’s predicament and are amicable to show the property. Sometimes you have to offer a little incentive to cooperate in the form of a gift certificate or rent credit. This is usually the case when rowdy pets or extremely valuable possessions are in the property. Tenant requires an appointment so they can be present to control/protect personal interests. If you are in a market where you can do it like JC…help hook them up if they want to stay. If you are in a market where the Buyers all intend to owner occupy it is not as easy to do this. Most lenders will only give a 30 day grace period for a Buyer to move into the property to give the “owner occupied” rate for a loan. Otherwise they raise the interest rate.
Correction- Sacramento has still not paid on its 1st government “acquisition”…almost, but hit another snag.
I wish I had never heard the word HAP. I am now officially disgusted with the process. Everything I heard and thought the program was supposed to be has turned out to be false.
With the last email I received from my counselor in Savannah I am in no better position than I was before hearing about HAP.
I did a Short sale which thank god I am finally rid of the house. I am eligible for over $80,000 in benefits but will end up getting nothing. My first Mortgage company forgave a portion of the mortgage and the second mortgage which was a Home equity line of credit I had to sign a promissory note for is not reimbursable.
This Heloc was basically my down payment, both my first and second did not go over the price of the house when i bought it.
I am probably rambling now but basically I ended up with no money and my credit took a beating.
Waiting- Can’t tell more without knowing all the details- but if the HELOC was part of your original mortgage purchase money- that sounds WRONG. Are they trying to tell you the note left is your part of a 10% contribution? There is either more to it, or you need to appeal.
Ok, we are stationed near NAS JAX I was just about to mail in my HAP PCS package. Just listed the house about three days ago don’t have a buyer yet and have a few questions.
1) Should I wait to submit until I have a buyer? I am upside down with my mortgage do not have money to bring to table to close.
2) I have spent lots of money on improvements like new A/C unit can I get money for that stuff in my situation?
3) What should the starting price be based on, COMPS?
Thanks and good luck to all!
Does any one know if your loans have to be by Fannie/Freddie to qual? I have a 1st and 2nd the first on is Fannie/Freddie the second junior one is not it is by some random company, does this matter?
I know this may seem repetitive, but I’m trying to simplify what I’m reading. My house is vacant, one mortgage, pretty straight forward. I bit the bullet and stopped paying before all my funds were gone and applied for short sale. When I find a buyer, here is what I understand my options to be:
Option 1 is use HAP to pay off outstanding mortgage and sell to the buyer I found. Credit hurts for missed payments, but not for short selling. Problem is I would need to bring the loan current and hope my escrow has enough to cover part of the property taxes. That’s a lot of cash to come up with.
Option 2 is to short sell. Lawyer thinks he can get them to forgive entire debt and closing costs with no note (kinda over confident). If the bank comes after me, thats what HAP is for. Credit takes a beating, but I don’t pay anything.
Am I missing anything?
Scott- You have it pretty well understood! There are some HAP benefits advisors really fighting for changes in the case of Option 1- because it REALLY STINKS that the banks are made whole but the service member is not. Particularly for those who transferred before the program “expanded” and have had to wait since February ’09 while the government figured out how to process. Given that there is no reimbursement for your expenses while awaiting processing- where are you supposed to get the money from to bring current? Technically they purport you should have stayed within your BAH to remain current on the mortgage- but if you were upkeeping two households that is a no go. Sad but true with no solution designed into the program in the name of helping more people with the money allotted.
Option 2- If you have a Lawyer negotiating short sale for you; be sure they also negotiate how the credit is reported in the pay status. Not sure on the verbiage (researching). However I do know that there is such a thing as a pay for delete agreement (Google it). Usually this requires you pay something in exchange for deleting it from the credit report entirely. Don’t know how successful this is as I don’t work in the credit arena. If they won’t do that then you can ask for whatever status is next best. Again, this is something I am researching. Unfortunately, I can’t find much specific to pay status categories on the internet and most financial people I have asked don’t seem to know.
Thanks again for everyone’s comments and answers provided on this forum. I think this type of information sharing is invaluable and I really appreciate any help that you all can provide. I was hoping that I could ask for clarification of the acquisition vs. private sale one more time. I have read this forum from start to finish, but it seems that some of the information conflicts a bit or perhaps I’m just not understanding everything correctly. In any case, my question refers to whether an acquisition can still pay the service member 90% PMV – sales price + closing costs OR whether acquisition simply means that the government pays off your mortgage balance + closing costs.
My situation is that I’m PCS’ing in May of this year and I’m beginning the process of marketing my home. Over the last few years, I’ve been able to pay off about 20% of my mortgage, so I have 80% remaining balance. As I understand it, if I went with an acquisition then I would be relieved of my 80% remaining on my mortgage and closing costs, but would surrender all of the money that I put in towards paying down the principal on my mortgage. If I go the private sale route, I believe that I would be reimbursed for a portion of the money I’ve put towards my mortgage (would have to take a 10% personal loss).
My concerns are two-fold. First, if I execute a private sale, I would have to find a way to come up with $100k or so while my file is reviewed and processed. Secondly, I would always have the risk of HAP denying my claim and leaving me with another $100k in debt that now has to be repaid. Am I correct in assuming that there is no review that HAP will do prior to my private sale to pre-approve me for funding?
If my above facts are correct, it seems that with a private sale you have to take a huge risk and leap of faith that you will qualify for funding. And if you don’t qualify for some reason, you are completely screwed. It sure would make alot of sense for the program going forward to offer the more pre-approved “acquisitions” where you can get either the 90% of PMV option OR the mortgage payoff option. I just don’t know that I can take the additional $100k risk that I’ll get approved if I do a private sale. Any suggestions? Thanks.
Alan:
Just my humble opinion, but I WOULD NOT count on HAP for anything. DO NOT borrow money to complete the sale and hope that HAP will pay you back–unless you’re prepared to kiss that money goodbye.
HAP has proven itself to be the typical government program: slow, expensive, and (worst of all) arbitrary and capricious. Congress screwed up when they used the words: “the Secretary may…” They opened the door for all kinds of foolishness: different classes of beneficiaries, 90% versus 95%, arbitrary caps on home values, PFMV calculations that bear no relation to the “fair market value” at the time of orders, 10% county losses versus 10% personal loss, no augmentations, and government acquisitions that are really augmentations.
Nearly a year after the legislation was signed into law and they still don’t have final implementation instructions. These guys should all be fired–publicly!
Alan please don’t loose heart. I will ask Denise, my angel realtor friend who is well versed (as well as anyone can be) in the HAP process to come on and try to answer your questions. I would try to but I would probably just confuse you more. Better to go straight to the source.
Yes, there are more questions right now than answers. That is not the fault of the people that are running the different HAP offices. They are just as confused as we are and they don’t have all the answers either. Perhaps when the final rules are published in the next few weeks we will have more clarity. While the program has not helped everyone as fast as we would have liked, applications are being paid out. It takes time to work out the kinks and to get the ball rolling. People will be helped with this program and patience is the key.
Karen
Through this whole process I have gotten to learn a whole lot about our government processes I do not like and wish I did not know. There is a lot more to what happens regarding this program- or any other government program, than meets the eye. Here is the issue in a nutshell- the rules could have lined up a whole lot better with the actual needs of the people being served. Because of some wording attorneys didn’t like in the law, they got involved and said HAP had to process in a way that makes no logical sense in most cases. OMB said they could only do certain things to stay in budget. Half these people know little to nothing about real estate and how their decisions affect people across the board. If they actually had to talk to any of you maybe they could relate better. HAP processors have to talk to you. Most of them are not happy with all the things they can’t do for you. For the sake of their own sanity they do what they can. There are lots of great processors in HAP system advocating for changes. Change of this order takes way more time than we would all like.
Because Sacramento has not fully processed for payment any of the government acquisitions yet- I sadly can’t confirm they are going to do it differently or better than any of the other districts. I have spoken to Stephanie (posted earlier) who actually closed one out of Savannah- and they did some things different in Savannah than they are telling me they will do in Sacramento. Makes no sense since it is the same program! I know the rules as they stand and most of the changes to be made. But it seems not much has gone at face value so far. I know the processors I have talked to after correspondence since February and most of what they have told me aligns with what I have seen on paper.
It has always appeared that to get money back into the pocket a Service Member would have to use the private sale method. It is only possible to get money back if you have a 10% or more cost share off the PFMV (5% for Wounded Warriors and Surviving Spouses). This involves coming up with more money to pay yourself out and then getting reimbursed. So yes, it appears as it stands, that if you can’t come up with money to close through private sale, you do not get any of your investment back. Yet you can decide to acquire at 100% mortgage. You get a house worth way less than what you owe on it off your payment cycle and stop the bleeding. This is a very unfortunate situation because if they were using the augmentation at time of sale method (old method) more people would actually get money back. Now, I have heard that some transfers are functioning almost like augmentation (the checks arrive day after close). I am not sure how it is working that way for some and not others. I am investigating this rumor from an escrow officer this week, as well as seeking more information on “bridge loans” to post for you all. I have a client who is Wounded Warrior checking into bridge loans now. If you have your entitlements letter confirming $$ of your benefits and it looks accurate, then hopefully you would not end up in the situation referenced by the others…hung out to dry with more debt and no collateral to show for it. I would certainly not make a move without clear HAP confirmation of how much I was getting and when I could truly expect to receive it. This would involve a little bit of faith that they will actually do what they say. It is a personal choice to make no less than fully informed.
Checking in – we’re still on for 14 Jan closing – rec’d fedex package late yesterday that was due back to HAP yesterday (go figure). We were out of town for a funeral – would have been nice to know that HAP was sending paperwork. Also notified that I have to come to closing with January’s interest plus taxes (surprise!). I hate this whole thing and can’t wait until its over with. Not sure if I can get what they need back to them in time for closing on thursday – we’ll see. My HAP person hasn’t called back or returned my email yet.
VINNYNY, Karen, and Denise,
Thank you very much for your replies and continued information. After thinking about my situation of needing to somehow come up with $100k to come to closing in a private sale with no guarantee of getting reimbursed, it seems like too big of a risk for me. I contacted the Savannah office (my place is in MD) regarding private sales and whether HAP would process my application after a contract was in place but before closing. This would at least give me the piece of mind that I qualify for the program and what my expected entitlements would be. According to them, the will “review” the application to basically make sure that nothing is missing, but they won’t make any final decisions until the closing paperwork is in. They won’t provide an entitlements document or anything for private sales. Somebody out there please tell me that this isn’t true and that you were approved for private sale reimbursement prior to closure…
The other idea that I had in an attempt to get “pre-approved” for funding in a private sale would be to put in my paperwork for a gov’t acquisition instead of a private sale. Then ride that out to the point of the entitlements document being sent to me. At that point, I would have some confirmation that I was approvable and could try and switch my application to a private sale. I realize that this still leaves me with a huge amount of risk because there is never any absolute guarantee that you will get funding until the reimbursement check is in hand, but it would give me a little more security in that I was approved for another part of the overall program. Who knows though, they may come back and say that it can’t be converted to a private sale, I’d have to start the whole process over again, or who knows what else…
JP, so glad to hear that you are in the final lap. Keep us informed as to what happens. My prayers are with you and the family.
Karen
Thanks Karen – If I can’t get a certified check and signed paperwork back to them by tomorrow closing will have to be rescheduled. I swear (literally). We have no banking centers here for pete’s sake. I am working with the bank to overnight a check and my husband is on his way to FedEx to send the signed paperwork. Would have been nice to have known we needed $. We scrambled late last night to find a notary. SO..for those that will be closing – be prepared to sign some papers which requires witness and notary. Also be prepared to pay interest for the month you’re settling in via cashiers or certified check. They tack on 7 days of interest ‘just in case’ and you’ll also have prorated taxes to pay. Any overages, escrow etc will be refunded to you at some point. Now I have to cross my fingers that both make it there in time and we hit no other snags.
JP thanks for the heads up. We are too close two weeks after you so I am hoping that yours goes well. They still have not given us our paperwork showing what funds are needed at closing. When are they going to let us know? We are out of state until closing so I am worried about funds needing to be transfered and paperwork needing signing. Oh well such is the way of the HAP world.
Karen
Karen – I would have gotten my settlement paperwork on Fri 8 Jan due back by Mon 11 Jan and closing 14 Jan. Not much notice. Up until Monday – I didn’t expect to need any funds for closing. I ended up needing $1931 for closing (interest and taxes, nothing else). If you’re due to close the end of Jan and have already made Jan mortgage payment you shouldn’t need much.
Also – there was ZERO communication on the settlement package. Neither myself nor my agent knew it was coming. We thought we were on top of things and all paperwork was done until I got a call that I had a package at the front desk.
Make sure you talk to your HAP rep….ASK about settlement.
(Who’s your HAP rep?)
Alan – if I’m reading your stuff right – you already have a buyer but have a 100k gap right? If your packet is in, make sure you’ve sent in everythign they need – get a contract with your buyer and include the clause that the sale is contigent upon HAP approval. Send your contract to HAP to include with your packet. Hopefully your buyer will be patient.
HAP will move faster if you have a contract pending – otherwise they have no reason to pull your folder out of the pile. Once HAP has a COMPLETE package AND a contract they will then send your file to benefits. They can’t move forward though unless they have a reason to (CONTRACT)
addition: they can’t move forward unless they have a reason to (Contract or private sale where you’ve already completed the sale and taken the loss).
Jp I believe my agent is Shannon Anthony. I just spoke with the HAP office and they said I should receive the package you mention this week. My husband and I will both be TDY the week that we close so I told them that if they are going to send us any paperwork that we needed to sign that they needed to do it before the 22nd of January (we close ????? January 29th).
Did they pay all your closing cost then?
Karen
Karen – we have the same rep. Yes, it seems (so far) that they will pay all our closing costs.
I wish they would have just paid the interest due as well – more money down the drain that I’ll never get back. I was hoping not to have to pay rent and mortgage for Jan.
JP where in Maryland was the house? We are here in Waldorf right now renting. Our home is in Mongomery AL where Mike was at the Air Space Institute. And where are you all now?
Karen
On the HAP website under FAQ’s:
Q. Will I have to bring any money to closing?
A. If you occupy your home until or nearly until the closing date and have not made payment for the month, you will be responsible for interest due for the previous month plus year-to-date real estate taxes.
Does that mean that since my home is vacant for the past 6+ months I don’t have to be current on my payments? Too good to be true.
You are right-it is too good to be true because that is not what it means. What it does mean is if you are closing this month, and have not made your mortgage payment for the month, you are liable for it at closing. HAP will not make the payment for you to bring you current. Also, depending on how your state handles taxes, you might have to pay several months up front as prorated taxes and then get it back from your escrow company. You must be current on your mortgage and taxes when it comes time to close.
Karen
Thank you Denise and Karen,
Can I put out some actual numbers, so we can all play along and learn? (I appreciate when others do so, and it seems less awkward here than if you’d say the equivalent in casual conversation)
I bought for $220,000 in Nov 04. I had an 80/20 primary and HELOC for 176,000 and 44,000 through USAA. The entire HELOC went only to the purchase of the home – nothing else. There was no money put down.
Since then, principal and interest have been paid down to just over 201,000, which means my loan balance isn’t yet at the 198,000 which triggers the 10% loss.
Zillow.com lists the current market value as 147,000. Clearly, that’s beyond the 10% loss. What I’m seeing is that my current mortgage owed (critical for me that we include both the primary AND the HELOC) is almost at the same level as what HAP would seem to reimburse up to (the 198,000, which is the 90% PMMV).
So a couple of questions to draw from your knowledge:
1. First of all, people in my position seem to be eligible to have BOTH the 80 and the 20% original loans taken into the math of PMMV, right? (they wouldn’t use 176,000 as PMMV in