Assuming an FHA loan

[mzrebroker]

Hello,
My sister and I have inherited a 3 family home but there is bad blood between us, as the executor of the estate she is ordering the house for sale. Its a if I cant have the house you can't either type attitude. She does not reside in the same state of the home. I currently live in the home, and want to keep it,as our mother did not want the house sold. I have made arrangements of the purchase of the loan through FHA knowing that it is assumable. I have the following questions:

How long do I have to wait after closing to assume the loan?
After I assume the loan, does the original buyer have to remain on the deed (minority percentage ownership), if so how long?
I will be able to show ability to assume the loan as I am using the proceeds from the sale. Will I have to put down any additional monies, or can pay the existing (mortgage I am assuming) several months in advance.?
When I assume the loan can I take out any additional monies?
I cannot be on the loan as very low credit score, while the buyer is close to 800.
I have contracts and such in place as to protect myself throughout this transaction. If there is any way I can be on the loan intially that would be great. My credit score about 510. There are alot of little things, no bankrupticies but many charge offs. I did repay a deliquent student loan, and am currently in school with student loans. Can these be used at all, I am not paying them off, but can begin this Nov.
I am a real estate broker by trade,2008 (self -employed) and claim about 38,000 in income with a 48,000 loss on a leased-option investmet property. I have no taxable income for 2007.



There is a great deal of equity in the home as it only has a refi done in the year prior to our mothers death. Even after we pay it off,with penalties and such (we are behind in payments) the home is still valuable.

[dsemler]

Not sure I follow yoru whole story.
If the house is worth say $100,000 and you and your sister are to divide it equally between you per your mothers will then each of you are entitle to $50,000 (not taking into account any type of closing cost or sales cost). The question then is what is the mortgage amount currently on the home? Let's assume it is $80,000. Then after paying of the mortgage you and your sister would split the $20,000 equally.

As for assuming the loan, FHA loans are now Qualifying Assumable. This means that you must qualify both on credit and income. You can not just walk in and take it over like in the old days. You would need to have the current lender send you a package to complete for the assumption and there is generally a 1% assumtion fee. Based on your details, it is not likely that you would qualify but the lender would make the decission once your completed everything.

On an assumption you can not get any money. In fact you would have to pay money. In the above example if you were to assume the $80,000 mortgage your still owe you sister $10,000 which you would have to pay durring the assumption in order to perfect the title since she would not sign a deed from the estate without her cash.

The only way to really do this is to have a third party -- maybe your spouse -- purchase the property from the estate. Since you would not be on the loan and title, you inheritance would nto be counted and your spouse would need to come up with the money for the downpayment and close assuming that you are not in a community property State which would create some issues.

[mzrebroker]

Thank you for your advice. I have already instituted a 3rd party who is doing just that. I will use my share of the inheritance to buy back the property from the estate, showing proving I have the means to do so. thanks agian.