Bought HUD house, lost job -- can I sell now or do I have to wait 12 months?

[Capsaicin]

*Note: this isn't my scenario, but that of a family member who was curious to know if anyone has insight into this situation.*

He bought a foreclosed house through HUD in the summer of 2013, with the stipulation that he live in the house for at least one year before selling -- this is because the government is discouraging house flipping in favor of encouraging primary residence ownership.

He wants to keep the house. However, he got laid off in December, and is having trouble making the mortgage. He is collecting unemployment, working part-time in food service, and is getting a roommate. These moves still leave him about $500 short each month from being able to pay all of his living expenses.

Unless he gets a job paying at least 30K soon, he will be foreclosed on because he can't make his mortgage OR he will have to sell the house and move into something more affordable ... but he's not clear that he can due to the HUD owner occupancy requirement, and he has yet to get a clear, definitive answer from anyone as to whether he can legally sell the house before 12 months have passed. He has spoken to real estate agents, HUD, and a lender but the answers are somewhat vague.

For example, HUD sent a generic email that basically restated the original requirements and warned about huge fines or imprisonment if the house is sold too soon -- but no comments on what someone in true financial hardship can do.

Does anyone know definitively whether or not he can sell the house now without risking legal problems?

Is there an allowance for genuine financial hardship or are the owner occupancy rules completely inflexible?

[Lil_Bit]

See if he qualifies for any of these programs listed on the HUD website:

http://portal.hud.gov/hudportal/HUD?src=/topics/avoiding_foreclosure


(Here are a few options that were listed)

Assistance for Unemployed Homeowners:

Home Affordable Unemployment Program (UP):
If you are having a tough time making your mortgage payments because you are unemployed, you may be eligible for UP.  UP provides a temporary reduction or suspension of mortgage payments for at least twelve months while you seek re-employment.

Emergency Homeowners’ Loan Program (EHLP), Substantially Similar States: 
If you live in Connecticut, Delaware, Idaho, Maryland, or Pennsylvania, for more information about EHLP assistance provided in your state.

FHA Forbearance for Unemployed Homeowners: 
Federal Housing Administration (FHA) requirements now require servicers to extend the forbearance period for unemployed homeowners to 12 months. The changes to FHA’s Special Forbearance Program announced in July 2011 require servicers to extend the forbearance period for FHA borrowers who qualify for the program from four months to 12 months and remove upfront hurdles to make it easier for unemployed borrowers to qualify.

[Capsaicin]

Thanks, Lil_Bit.

We will look into these programs.

This might be the way to go.

[Lil_Bit]

You're welcome.  I wish your family member well, I know this can be a very stressful time, but tell him to not give up.  Take care.