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!

 It’s Wendy!

Wendy Rulnick, Broker, Rulnick Realty, Inc.

Call toll-free 1-877-487-9639 or local 850-650-7883 ext 204

Email Wendy: itswendy@rulnickrealty.com

Destin Short Sales & Pre Foreclosure Help.

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This home in Vesta Heights, Fort Walton Beach Florida, has been approved for HAP sale.  The property went under contract just three days after going on the market! HAP approved the contract and replaced it with their own 11 weeks later.

Things to know:

1. Even though the HAP (Homeowners Assistance Program for U.S. military) website says your home should be marketed for 120 days, the fact is, HAP really cares that you get  “fair market value” (or 90% thereof). In this case, it was fortunate that the buyer happened to be looking for a home near Eglin Air Force Base and this exact match became available.  I’ve sold many HAP contingent homes in Fort Walton Beach, Navarre, Crestview and Destin Florida in less than a week. All the sales were subsequently approved by HAP, and none ever had a counter offer of price, nor had time on market questioned.

2. How is contract price supported to HAP?  When you get a contract on your HAP home, I prepare a market analysis for you to send in to HAP along with your contract.  Before you accept an offer, I let you know if the price and terms are in line with HAP might find acceptable. What does that mean? The contract should be approximately 90% of supportable fair market value.

3. What about cases of difficult to sell  HAP homes that only get low offers? If you can prove your home was exposed to the  market  for a period of time, you may be able to get a sale price that seems otherwise low approved by HAP.  An example I have is a home in Navarre Florida that was on East Bay, but surrounded by homes of much lesser quality. This property could only garner a seemingly low price.  We sent HAP all the detailed marketing for the property, along with showings and feedback from potential buyers. The contract price was approved.

Do you have questions about your potential HAP sale in Fort Walton Beach, Crestview, Destin or Navarre Florida? Email me at itswendy@rulnickrealty.com

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If you are an Eglin Air Force Base or Hurlburt Field seller thinking about HAP, (military Homeowners Assistance Program), you may not be aware that effective February 1, the GAPS (Government Assisted Private Sale) has ended.  Since we are talking “military”, there are a lot of acronyms, so I’ll start with a quick explanation.  HAP is the program run by the Army Corps of Engineers that was expanded to assists U.S. military service members  who have Permanent Change of Station (PCS) assignments, with “upside down mortgages” avoid foreclosure or short sale. Basically, HAP will cover the shortfall (part of mortgage balance left over after net proceeds from sale) at closing if the service member qualifies for the program.

Formerly, there were three types of HAP sales: Government Acquisition, Private Sale, and Government Assisted Private Sale (GASP).  Here is a quick, simplified explanation of each:

Government Acquisition: The U.S. will buy the subject property from the qualifying service member, and simultaneously pay off the mortgage balance not covered by the sale, selling the property to the buyer the service member found (normally through his Realtor).

Private Sale: The qualifying service member sells his home and covers the mortgage shortfall himself. The U.S. will reimburse the service member some time after closing.  The reimbursement calculation is simplified as: 90% of your prior fair market value (your purchase price plus costs of improvements), add  7% for closing costs, then subtract out your new purchase price and mortgage payoff, plus any buyer credits and actual closing costs.  Using this private sale method, some military members can  recoup more of their lost equity, dollars they have actually used for downpayment or improvements, as compared to the Government Acquisition, which will just pay off the mortgage deficit.  The caveat with Private Sale, is that you would have to cover the entire shortfall at closing, then “wait” for the U.S. reimbursement check.  That process can  takes weeks or months.

Government Assisted Private Sale (ended): Instead of waiting for your U.S. reimbursement check after a “Private Sale”, you were paid by the Government at closing.  This program has ended, effective February 1, 2012, per my contacts at HAP. In fact, my latest HAP closing on January 31, was a GAPS, and we were told any extensions to the closing date would remove the seller from the program.

So, what does this mean to you, the Eglin AFB or Hurlburt Field airman?  You still have two HAP options available, Government Acquisition or Private Sale.  In any event, the good news is that if you need to sell your home, and qualify for HAP, you can avoid foreclosure, short sale or VA Compromise Sale, and keep your credit score intact.

Do you have questions? Email me at itswendy@rulnickrealty.com

It’s Wendy!

Wendy Rulnick, Broker, Rulnick Realty, Inc.

Call toll-free 1-877-487-9639 or local 850-650-7883 ext 204
Email Wendy: itswendy@rulnickrealty.com

Eglin AFB and Hurlburt Field VA Compromise, HAP, Short Sale Help

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