The Homeowner Assistance Program (HAP) for the military has just received the Department of Defense directive that will affect military PCS sellers who are upside down on their mortgages. I have published a series of updates on HAP, and this just-released update is summarized from the HAP website due to the urgent need for Eglin Air Force Base and Hurlburt Field airmen who have received orders:
Although DoD guidance has been established, we are unable to begin processing applications until we comply with rule making procedures established by the Administrative Services Act. District field offices are reviewing applications for compliance with DoD guidance and will notify applicants of eligibility as early as possible.Implementation Rules and Eligibility Criteria for American Recovery and Reinvestment Act (ARRA) Expansion of the DoD Homeowners Assistance Program (HAP)
The overall goal of the HAP is to minimize the amount of financial harm, risk of foreclosure, credit damage, or bankruptcy experienced by servicemembers and DOD civilian beneficiaries when they are compelled to move in an unprecedented real estate market as a result of their service to the United States. In that vein, the following policies provide a solid basis for determining eligibility for the ARRA HAP expansion and ensure this effort is managed efficiently and successfully.
• As the second priority category, the new policy will expand the HAP BRAC benefit by removing the requirement that the homeowner show that the BRAC closure or realignment action was the cause of the drop in the value of the home.
• The Department is also creating a temporary benefit for qualifying Permanent Change of Station (PCS) moves
• In all cases, the benefit is for a primary residence only, and the benefit may only be used once.
• Use Purchase Price as the Prior Fair Market Value (PFMV) for all beneficiaries, including BRAC
o Current Policy: PFMV is determined at the date of the BRAC announcement.
o Description of Change: The BRAC announcement date is not relevant to many new HAP beneficiaries. The best equivalent PFMV is to use the purchase price of the home. For BRAC and PCS moves, the home must have been purchased prior to July 1, 2006.
o Outcome: Avoids unnecessary claim costs because BRAC announcement date was near the peak of housing market and BRAC announcement date is no longer relevant.
• Set the allowable Private Sale reimbursement to 90% of Prior Fair Market
Value for BRAC (non-causation) and PCS move beneficiaries
o Current Policy: Prior HAP allows for 95% Private Sale reimbursement
o Description of Change: Losses on private sales will be reimbursed at 95% of PFMV for Wounded Warriors and Surviving Spouses, as well as BRAC communities that can prove causation. It will be reduced to 90% of PFMV for all other beneficiaries.
o Outcome: Communities that can show BRAC causation have an incentive to do so; reduces per-claim costs for BRAC (non-causation) and PCS moves; maximizes assistance to the fullest extent for Wounded Warriors and Surviving Spouses, and makes overall policy consistent with 10% individual loss eligibility threshold.
• Government acquisition (or mortgage payoff) will be 75% of PFMV for all beneficiaries (except Wounded Warriors/civilians and surviving spouses) who have made reasonable efforts to market their home and cannot sell under reasonable terms and conditions. Wounded Warriors, wounded civilians, and surviving spouses who cannot sell under reasonable terms and conditions will receive 90% of PFMV.
o Current Policy: Government acquisition is 75% of Prior Fair Market Value.
There is no standard level of effort a homeowner must make before the government acquires a home or pays off the outstanding mortgage.
o Description of Change: While statute allows purchase up to 90%, current policy limits government acquisition to 75% of PFMV. Only wounded warriors, wounded civilians, and surviving spouses would receive the full 90% of PFMV for government acquisition of their houses. As previously noted, losses from private sales will be reimbursed up to 95% of PFMV for wounded warriors, wounded civilians, and surviving spouses. These changes also strengthen current policy by specifying government acquisition is allowed only if applicant is not able to sell home after 120 days of marketing it at a price level deemed appropriate for its local market circumstances by the US Army Corps of Engineers, and therefore the applicant is in danger of foreclosure.
o Outcome: Prior HAP experience with government acquisition of homes has shown significant maintenance costs from acquired homes and resulted in reduced HAP resources being available to pay other applicant claims. Incentives have been built into the existing HAP program over time to favor private sales rather than government acquisition. Strengthening current policy discourages government purchase of homes and costly carrying expenses. It also allows HAP resources to go further and assist more applicants.
• Cap the Maximum Home Purchase Price as an eligibility threshold
o Current Policy: There is no maximum home value established for a beneficiary receiving a HAP benefit.
o Description of Change: Links the maximum cap to the 2009 Fannie Mae/Freddie Mac Conforming Loan Limits (as amended by the ARRA of 2009), which range from $417,000 to $729,750 (depending on county or Metropolitan Statistical Area). The 2009 Conforming Loan Limits would apply to all homes in the program from FY 2006 to FY 2012.
o Outcome: Prevents taxpayers from ‘bailing out' million-dollar homes, but is adjusted by region to account for cost variations.
4• Claims Processing
o For BRAC or PCS moves, the ARRA requires that home must have been purchased before July 1, 2006.
o For BRAC moves to be eligible, the property must be sold by September 30, 2012.
o For PCS claims to be eligible, the home sale must result from PCS orders issued on or before December 31, 2009, and the application must be recieved by March 31, 2010.
o Outcome: These policies are designed to ensure that regardless of when a claim arrives, there will be sufficient resources available for Wounded Warrior, wounded civilian, and Surviving Spouse claims, as well as for BRAC claims (most of which will occur in FY 2010 and FY 2011).
• Pay PCS claims for home sales resulting from PCS orders issued by December 31, 2009, or until available ARRA resources are depleted.
o Outcome: Uses allowable statutory authority under the ARRA to set an end date for the PCS portion of expansion program based on projections of when the available funding will be depleted. The PCS home sale deadline will be reviewed as initial claims are processed and can be extended, if resources allow, based on a close monitoring of claims payment history.
Here are the program sales price limits, based on Fannie Mae and Freddie Mac, for Eglin AFB, Hurlburt Field and the rest of the United States,
Also, read Major Jason Trew's letter to Congress regarding the HAP July 2006 cut-off date for assistance.
We expect more details to be forthcoming, check back on this blog. As always, consult an experienced real estate agent to help you with selling your PCS property.
It's Wendy!
Wendy Rulnick, Broker, CRP, CRS, GRI, ABR Rulnick Realty, Inc.
Emerald Coast Short Sales & Pre Foreclosure Help.
Read Emerald Coast Real Estate Blog
Call toll-free 1-877-ITS-WNDY (1-877-487-9639) or local 850-650-7883 ext 204
Email Wendy to sell your home or buy a home: itswendy@rulnickrealty.com
Call Wendy Rulnick, Destin real estate agent, to list and sell your home or condo or help you buy a home or rental property on the Emerald Coast of Florida in Walton, Okaloosa and Santa Rosa County- Destin, Santa Rosa Beach, Fort Walton Beach, Niceville, Bluewater Bay, Navarre, Seagrove Beach, Watercolor, Sandestin, Seaside, Crestview, Rosemary Beach, Mary Esther, Shalimar, Eglin AFB, Hurlburt Field.
Since writing Eglin AFB and Hurlburt Field: Homeowner Assistance Program (HAP) for Short Sales, more information has come to light. Or lack of thereof! I have received numerous calls and emails looking for clarification on how the program will be implemented, and how it will affect PCS sellers (military relocation term meaning "permanent change of station"). Currently, the issue is there is no directive from the Department of Defense as to how to process HAP applications, nor many program specifics. My area, from Navarre to Destin, Florida and up through Niceville and Crestview has approximately 3000 airmen relocating to other bases around the country and the world. Many of those airmen purchased homes during 2004-2006, and do not have enough equity to sell their houses when they must relocate and pay off their mortgage balance. HAP is supposed to help, but as of yet, there is no help.
Here is the latest result of my HAP research:
Mr. Frazier, of the HAP Savannah District told me:
When the DOD directive is implemented, he said:
Additionally, I inquired by email and received this communication from HAP Realty Specialist, B.M. Reed, summarized and with emphasis added:
Ms. Rulnick,
The Department of the Army, in coordination with the other military departments, is in the process of finalizing implementation guidance for the expanded HAP, including determining eligibility, restrictions, and disqualifications. Based on the current HQ timeline for review and official approval of the guidance, it may not be until late May before the implementation guidance is at district level. When the implementation guidance is issued, it will be published on the official HAP website, which can be found at http://hap.usace.army.mil
Unfortunately, without the referenced implementation guidance any attempt to provide detailed information on the Stimulus Bill HAP eligibility, disqualifications, benefits, or how benefits will be calculated would be merely speculation.
Under this program the Government might be able to reimburse applicants part of the loss from 
selling their home (private sale benefits) or assist applicants if they do not have enough proceeds from the sale of the home to pay off the mortgage at Closing (private sale augmentation). Benefits may be based on the difference between the prior fair market value (PFMV) of the property and the current fair market value (CFMV). The PFMV may be determined by an appraisal effective 1 July 2006, or possibly the purchase price of the property might be used; the CFMV may be determined by the appraised value at the time of sale or possibly the selling price itself. The Government could pay an amount up to a stipulated percentage of the difference between the two figures used for the computation. Again, guidance has not yet been published so a completely different scenario might be used to compute benefits.
The term 'private sale augmentation' merely means when an applicant's benefit payment is brought by the Government to a Closing in order to assist the applicant with the payoff of a mortgage and typical seller closing costs so that the sale can be finalized. In order to be eligible for a private sale augmentation, an applicant must maintain current payment status on his/her mortgage from the time an application is submitted through Closing.
While the implementation guidance is being finalized, potential applicants are free to apply now by visiting the HAP website to fill out, print and mail in an application to the appropriate district for the area in which the property in question is located. Instructions on how to apply can be found at http://hap.usace.army.mil/HowToApply.html
I've attempted to provide you some information as best I can without having yet received implementation guidance on the program from the DOD. What information there is available on the Stimulus Bill HAP (ARRA) can be located on the Army's official HAP website at http://hap.usace.army.mil. There is wealth of information under the section of FQAs at http://hap.usace.army.mil/FAQs.html
B. M. Reed, Realty Specialist
HAP Section, Acquisition Branch,
Real Estate Division (RE-HA)
US Army Corps of Engineers
PO Box 889
Savannah, GA 31402-0889
What a predicament for relocating servicemen. How can you put a home on the market contingent on HAP approval, unless you get a buyer willing to wait with no closing date? What if you have already changed bases and cannot continue to make mortgage and/or rent payments in both locations? According to HAP, you must stay current on your mortgage payments to qualify for the program.
I encourage servicemen to contact their state and federal representatives to hasten a resolution of the HAP quandary. Meanwhile, stay tuned for the latest updates.
It's Wendy!
Wendy Rulnick, Broker, CRP, CRS, GRI, ABR Rulnick Realty, Inc.
Call toll-free 1-877-ITS-WNDY (1-877-487-9639) or local 850-650-7883 ext 204
Email Wendy to sell your home or buy a home: itswendy@rulnickrealty.com
"Half Life" by John Hollan
When I first walked into John and Deah Hollan's home in Santa Rosa Beach, Florida, I was struck by the exciting decor and contemporary flair. I remember strolling into the living room, my eyes big and my smile bigger. I turned to my right and then my jaw dropped. There was one of the most beautiful paintings I had ever seen. I exclaimed that I "loved" it and was truly moved! My mother was an artist so I have always appreciated art and the creation of it. John said he had painted it, as he had several others around the home. I sold John and Deah's home in Pelican Bay a few months later, and they honored me by presenting the painting to me as a "thank you". I actually got misty-eyed at the closing to have received something so beautiful and meaningful.
Here is the painting in my home. It looks perfect on my fireplace mantel.
John Hollan is also a gifted photographer and has a studio in Gulf Place, Santa Rosa Beach, FL. He specializes in beach photography, portraits, pet portraits, and of course, art! You may contact John at johofoto@embarqmail.com.
Wendy Rulnick, Broker, Runick Realty, Inc
Destin Florida
877-487-9639 ext 204
Beachside 2 Condo, Sandestin Florida
This Sandestin Florida short sale was submitted on March 4 and received approval on March 27- three weeks!
Factors:
Property: Gulf front condo in the Sandestin Beachside 2 building
Marketing Challenge: 5 year inventory of condos for sale in Destin Florida
Mortgage: EMC
Original Purchase Price: $800,000
Sale Price: Full Price offer of $359,000
Debt Cancelled: Over $350,000
Promissory Note: None
Cash Contribution: None
Contact an experienced real estate broker to sell your short sale on the Emerald Coast of Florida.
It's Wendy!
Wendy Rulnick, Broker, CRP, CRS, GRI, ABR Rulnick Realty, Inc.
Search All Destin FL Real Estate
Destin Short Sales & Pre Foreclosure Help.
Call toll-free 1-877-ITS-WNDY (1-877-487-9639) or local 850-650-7883 ext 204
Email Wendy to sell your home or buy a home: itswendy@rulnickrealty.com
Call Wendy Rulnick, Destin real estate agent, to list and sell your home or condo or help you buy a home or rental property on the Emerald Coast of Florida in Walton, Okaloosa and Santa Rosa County- Destin, Santa Rosa Beach, Fort Walton Beach, Niceville, Bluewater Bay, Navarre, Seagrove Beach, Watercolor, Sandestin, Seaside, Crestview, Rosemary Beach, Mary Esther, Shalimar, Eglin AFB, Hurlburt Field. Wendy is a short sale and pre-foreclosure specialist and can help you sell or buy a short sale property in and around Destin Florida and the Emerald Coast.
Due to the draw-down of the 33rd Fighter Wing at the Eglin AFB complex, approximately 2000 airmen are being relocated from the Emerald Coast of Florida to other air force bases around the country and world. In addition, about 1000 personnel from Hurlburt Field are moving to Cannon AFB in Clovis, New Mexico. Unfortunately, airmen in the Fort Walton Beach, Crestview, Navarre, Niceville and Destin areas of Florida are facing the same predicament as most Americans. Many have mortgage balances that are more than the market value of their homes. Typically, when faced with a forced military move, and such choices as to lease out their homes with insufficent rent to cover the mortgage, or foreclosure, the preferred strategy was to conduct a short sale. A short sale occurs when the seller's mortgage holder accepts fair market value at sale of the property, and, in the best case scenario, forgives the rest of the mortgage debt.
The good news for Eglin and Hurlburt Field military personnel is that further financial help may be available through the Homeowners Assistance Program (HAP). HAP is a long-established Department of Defense program that is managed by the US Army Corps or Engineers. HAP was initially used only to assist in Base Realignment and Closure (BRAC) moves, but the new economic stimulus plan has expanded the program to include Permanent Change of Stations (PCS) moves.
What HAP offers in terms of relief is the following:
The Government may-
1. Reimburse you for part of your loss from selling your home
2. Assist you, if you don't receive enough proceeds from the sale of your home to
pay off your mortgage
3. Help you, if you default on your mortgage, if you are a surving spouse or certain civil service
Further, HAP states you should continue try to sell your home on the open market. At this writing, according to the program, you may be paid up to 95% of the difference of the Fair Market Value prior to the BRAC or PCS announcement affecting you, and the appraised value at time of sale, with potential for some closing cost reimbursement. HAP will not reimburse for the total loss. At the time of this writing, I have three Hurlburt Field and Eglin AFB home sellers who have applied for HAP simultaneously while attempting a short sale. How the government will interact with short sale lenders is to be determined.
Local Eglin AFB commanders are still trying to get formal interpretation of the program as it applies to Emerald Coast airmen. At this time, there are no specifics, so any published information is subject to change. Of note, one of the controversial limits of the program expansion in the new American Recovery and Stimulous Act is that it applies only to homes purchased prior to July 2006. This limiting date does not correspond to the still-inflated real estate market in the ensuing months, in which many military members continued to purchase homes as outlined by Air Force Major Jason Trew's Letter to Congress.
While the language in the current bill is still being interpreted by Air Force authorities, you might be eligible to receive benefits under the new legislation. If you are in a short sale situation, stationed at Eglin AFB, Hurlburt Field or Duke Field, you should see your commander or first sergeant and make your Application for Homeowner Assistance.
For more information, read my follow up post HAP Update: Eglin AFB and Hurlburt Field. As always, consult an experienced real estate agent to help you through the process.
It's Wendy!
Wendy Rulnick, Broker, Rulnick Realty
Featured Short Sale Specialist in "Kiplinger Magazine"
Email: itswendy@rulnickrealty.com
Call Wendy at 850-650-7883 ext 204
All Rights Reserved. *Eglin AFB and Hurlburt Field: Homeowners Assistance Program (HAP) for Short Sales* Contact Wendy Rulnick regarding Eglin AFB and Hurlburt Field, Florida real estate and vicinity. Copyright © 2009 by Wendy Rulnick.
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Destin short sales, real estate, homes for sale, condos on the Emerald Coast of Florida- Destin, Sandestin, Fort Walton Beach, Santa Rosa Beach, Seagrove Beach Navarre, Niceville.
