As an Eglin AFB area agent who specializes in HAP listings, I frequently receive contracts from agents who are not familiar with the HAP program. Since our Emerald Coast area is home to Air Force, Navy, Army and Marines at Eglin AFB, Hurlburt Field, Duke Field, Whiting Field and Camp Rudder, you will find several listings that are sale type “HAP” when searching the Emerald Coast MLS.
If a HAP home seems right for your buyer, what do you do?
First, know what HAP means. It is the Homeowners Assistance Program for the Department of Defense. HAP helps military members who have orders to relocate, but own homes with negative equity, cover their mortgage losses in order to sell. The HAP program was expanded in 2009 to help Wounded Warriors, Surviving Spouses, BRAC-impacted service members and PCSing service members. If the service member qualifies, HAP will pay their mortgage deficit at closing.
How does HAP benefit your buyer? AP HExplain to your buyer why HAP is more favorable than buying a short sale. With HAP, the waiting time is normally 60 days for final approval, and 30 days to close. That is better than a short sale which could take 120 days or more for approval. And most HAP sellers have been pre-approved for the HAP program, which will save even more time. (Ask the listing agent to find out.)
What do you put in the HAP contract? Specify that it is “contingent on HAP approval”. Use a date-certain closing date that is 60 days out. I know, this seems to contradict that HAP wants 60 days for approval, but they also want a 60 day closing date written in the offer (not closing “within 30 days of HAP approval”).
Price? HAP wants contracts that are near fair market value. They will validate pricing through their internal system, and also via the listings agent’s market analysis.
Terms? HAP contracts should be “as is”.
Closing cost assistance? HAP may pay some of the buyer’s closing costs. It depends on what type of HAP program the seller is using. If it is a HAP GAPS (Government Assisted Private Sale), where the seller is getting a reimbursement, your buyer may not be able to get as much closing costs paid as a GA (Government Acquisition).
What’s next? Depending on what type of HAP sale is best (GAPS or GA), HAP may replace your contract with a new one that is between the United States and your buyer. If there is a replacement contract, your buyer can pick his own title agent. The U.S. will simultaneously buy the house from the seller and sell it to your buyer on the same day.
Finally – congratulations are in order! You’ve found your buyer a new home in Crestview, Navarre, Fort Walton Beach or Destin Florida, had a quick closing and helped a U.S. military member with the HAP program!
Wendy Rulnick, Broker, Rulnick Realty, Inc.
Call toll-free 1-877-487-9639 or local 850-650-7883 ext 204
Email Wendy: [email protected]