My Wrap Hit a Snag, Looking for Other Ideas

[Dean Weltman]

Guys and Gals,

My first wrap hit a problem - HUD apparently doesn't allow wraps of FHA mortgages. I have a buyer ready and willing, but he insists on only doing an owner financed transaction.

Here's the skinny: I have a SFR that I owe about $100k, just put $25k in for renovation (and major plumbing repairs), and agreed to sell it at $145k. Not enough room there for a realtor, so I'm doing a FSBO. But, with FSBO it seems that everyone wants it owner financed.

My buyer is ready to put down $30k to buy it, and I was going to sell it on a wraparound note, adding about 2% to the remaining balance. This was looking very lucrative, but now the problem with wrapping FHA loans. Any ideas out there on how I can still get this done?

Is the FHA restriction only based on administrative discipline? What are the chances of the DOS clause getting called? What else am I missing?