April 19, 2021

covid 19 PFS

Homeowners with FHA loans have options when facing foreclosure as a result of COVID 19. 

FHA offers many options to help borrowers in default get back on track with their payments. But keeping the home is not always an option, and often there is simply not enough equity in the home to sell at a profit! What then? 

FHA COVID-19 Pre-Foreclosure Sale

What is the Covid-19 PFS?

A COVID-19 Pre-Foreclosure Sale (COVID-19 PFS) option is available to borrowers who are experiencing a hardship affecting their ability to sustain their mortgage due to COVID-19, and who are not eligible for home retention options, or do not wish to stay in the home.

But what if I owe more than my home could sell for?

FHA loans are frequently low down payment loans leaving little equity in the home to begin with. Any attempts at forbearance or loan modification may have resulted in a partial claim leading to excess debts against the property. 

what is a partial claim?

Homeowners with defaulted FHA loans are frequently in a negative equity situation and cannot sell traditionally. The FHA PFS (FHA short sale) allows homeowners to sell for less than they own on their homes and have the difference forgiven. 

How do I qualify for a A COVID-19 Pre-Foreclosure Sale?

*FHA is currently offering a streamline, no document COVID 19 Streamline short sale through April 2025*

fha short sale

Short sales are complex, time consuming and come with a danger of foreclosure if not successfully closed. It is critical to get the expert help you need if you intend to pursue a short sale. 

Last Updated on March 18, 2024 by Minna Reid

About the author 

Minna Reid

Minna Reid is The Broker - Owner of Reid Real Estate Group. Reid Real Estate Group is a full-service Connecticut residential real estate brokerage, specializing in helping homeowners with legal and financial challenges including short sales, probate sales and tax lien complications.

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