Question: I have a mortgage loan customer who wanted to purchase a home for $149,000. This property was deeded from a sister to her brother and sister-in-law for $6,000 a year ago. The transaction has now been canceled because FHA financing is unavailable.

This property has been in all of the sellers' names at one time or another since 2000. The brother and sister-in-law owned the house and transferred it to the sister for $1,000 early in 2002. The brother and sister-in-law were added back on title later in 2002. Then the sister was removed from the title 36 days ago and now HUD is telling us they will not insure FHA financing.

This does not seem fair to the buyers nor the seller. How can we get HUD to insure the loan?

Answer: You can't.

Since June 2, 2003, the FHA has had a policy under which it will not finance any home which has been re-sold within 90 days of acquisition. Because of a title transfer several weeks ago, there has been a change of ownership within 90 days thus the property does not qualify for FHA financing. HUD, under this policy, will not make case-by-case exceptions. (See the Federal Register for May 1, 2003, page 23370)

Several points should be made here:

First, families often engage in real estate transactions which do not reflect economic values. The most common is the addition of a spouse to a deed in exchange for "good" consideration -- love and affection.

Second, it should be possible to finance this property with a non-FHA loan. Most likely you will need a second appraisal to justify the value because of the many transfers during the past few years.

Question: Our dilemma is this: We purchased vacant land with a seller carry-back for three years. If we tap in to our home equity line of credit that we have on our principal residence to pay off this loan, can we claim the interest paid on our 2005 tax returns? What are the rules and restrictions?

Answer: In general terms, you can deduct interest on up to $1 million in acquisition financing secured by your home as well as $100,000 in home equity financing. However, is the land for investment? If yes, then it's likely that all the interest is deductible. For details, see IRS publication 936, Home Mortgage Interest Deduction .

As well, given that you have a three-year note, the central concern is not taxes, it's paying off a short-term debt or losing the property. Make sure you meet all the repayment terms of the note, even if the tax benefits are not the best.

Question: My husband and I purchased our home about 10 months ago and just recently found out that we have leaks in two rooms. Does a homeowner warranty cover leaks or is the expense on us?

Answer: There are different homeowner policies and coverage can vary. See if there is a deductible per item per incident. Also, see if there is a fee to inspect the damage. Between the deductible and fee it may not pay to invoke some policies for minor claims.

Is the source of the leak covered under a different warranty? For example, is the roof new? If yes, what about the warranty specific to the roof?

Question: I'm planning on building a home in the Ozarks. With the threat of possible wild fires, would a home made of concrete be more advantageous? What about an architect?

Answer: Concrete is surely less flammable than wood, but that may not be the issue. The real concern may be the distance from the home to wooded areas.

Before building, speak with the local fire marshal and ask how much space should be cleared around the home. As to an architect, the American Institute of Architects has an online architect finder that may be helpful.

Question: We live next to a rent-to-own property. They are now putting it back on the market a third time for a third family.

It really affects the neighborhood, they take no pride in home ownership. The last family had a flea infestation in the winter, and they caused flea problems over here.

They left the house in major disrepair ($12,000 worth of damage). We wish the financial company that owns the home would just sell it and not rent it.

We are all homeowners, and tire of having low income renters come in and trash our neighborhood and the homes they live in.

Answer: Under the terms of a rent-to-own agreement, the tenants are seeking the very status you hold: ownership. Moreover, you have no right to require that the property owners sell the home outright, just as they have no right to require the same of you.

Here's a question: In an effort to improve the neighborhood what have you done to help the would-be owners?

Question: I am a real estate salesperson in Louisiana. Is there any way I can join a Florida MLS?

Answer: As a salesperson or associate broker you work under the authority of a broker in Louisiana. If that broker is also licensed in Florida and belongs to an MLS there, then the problem is fairly straight-forward, obtain a Florida sales license.

However, if your broker is not licensed in Florida then you would need to work for a broker in that state and obtain separate a Florida license. That's fine unless a situation arises where your Louisiana broker has a conflict with your Florida broker.

If your Louisiana broker is not licensed in Florida, then ask permission to affiliate with a Florida broker. Get permission in writing. Do the same with the Florida broker. For details, speak with your professional association's attorney.

Question: How is capital gains tax calculated if you sell before 24 months? We have to move for financial reasons to another state but only bought our house a year ago. We have done a lot of home improvements in the meantime and can make a sizable profit, but have valid reasons for leaving the area. How is the capital gains tax calculated or can it be prorated in this instance? How does that work?

Answer: Generally you must have lived in a home for two of the past five years to shelter profits from the sale of a prime residence. However, there are a number of safe harbor situations where you may be entitled to some tax reduction if you live in the property for less than two years. If you must sell after one year, for example, and qualify under the guidelines, then your tax may be reduced by 50 percent.

For specifics, see IRS Publication 523, Selling Your Home and speak with a tax professional.

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