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6/07/2016

HERO Loan For Selling Home

Realtor asked me today:
"What can a Seller Do about a HERO Loan?"
HERO is in my opinion a scam on owners. It is same as property tax and never goes away until paid in full.
There is no assuming the loan- or qualifying to leave it on. It is stuck there until paid off.
In order to do a new mortgage, refinance or sale the property must have enough equity to allow it to stay on title. 
Example: Loan given is $30000. They completed about $11000 in actual cost improvements (this is the saddest part that homeowners don’t realize they pay ten times more for solar or insulation... this way rather than buying it on open market)
Twice a year a payment is made. It may take 20 years for balance to go down.
Seller cannot sell to buyer with Fannie, Freddie, FHA or USDA mortgage loan or conventional pricing and financing.
There are investors who will loan on them—higher interest rate and minimum 20% down.
The problem is- appraised value minus the Hero Loan is value used and from there 80% loan-
Buyer may need 30 -40% down depending on amount of Hero Loan, value of house etc…

Homeowners in Inland Empire, Riverside, Kern County, Fresno County etc seem to have fallen prey to these transactions. Most often the Homeowner is elderly or lacking financially. Is there a class action lawsuit against them yet? NO. But CFBP is investigating and fines pending...

Anything that sounds too good to be true is likely not real.
Free electricity? 
Okay disclaimer- I live off grid and have solar that is not HERO loan, was in fact upgraded to newer cheaper system. Solar has become so inexpensive you probably do not need a Hero loan to
install the panels and battery system.


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