Can I Sell My House with an SBA Lien?
In general, you will need permission to sell your home if the SBA lender placed a lien when you took out your SBA loan. There are many circumstances under which you may need to sell a home with an SBA lien on it. Here are a few:
I am changing jobs and must move out of state and buy another home.
If you are not in default of your SBA loan, then you should talk to your SBA Lender about “Substitution of Collateral” and “Replacement Liens”. In certain circumstances, the SBA Lender may be willing to allow you to essentially swap collateral if, in doing so, its rights are not adversely affected. In some cases, the replacement property may, in fact, have more equity making the arrangement even more attractive to the SBA Lender.
Another common scenario is the need to sell a rental property which is simply not making money and provide the SBA Lender with a lien on another property you own that was not previously pledged as collateral. Again, if this arrangement will not adversely affect the SBA Lender, they may allow you to do so and thereby permit you to liquidate non-performing investment property in order to use the capital more effectively elsewhere.
I will lose my house to foreclosure if I don’t sell it, but there is not enough money to pay off my mortgage and the SBA.
Under certain circumstances, the SBA Lender may be willing to accept a short sale if not doing so would likely result in a worse recovery or perhaps no recovery at all. If you are in this position, be sure you determine what it will take to payoff all tax liens and prior mortgages on your home, then approach the SBA Lender with the best offer you can obtain for the property and an appraisal of the property. In many cases, if the deal makes economic sense, the SBA and the SBA Lender will agree to it.