OfflineI was told yesterday (6/18/09) that FHA will now require a property to be seasoned for at least 90 days after recording of deed before they will finance. If deed takes 2 months, that's 5 months before reselling. Also told that Fannie/Freddie property must be seasoned at least 6 months.
I'm meeting w/ my mortgage guy this morning, but wanted to see if anyone else could verify this info. It would kill a flip from the way I see it.
Thanks,
Robbie Inks
Eternal Equity Investments
eternalequity@ymail.com
Joshua 1: 8-9
"Study this Book of Instruction continually. Meditate on it day and night so you will be sure to obey everything written in it. Only then will you prosper and succeed in all you do. This is my command—be strong and courageous! Do not be afraid or discouraged. For the Lord your God is with you wherever you go.”
Thought this might be useful info for everyone.
-Matt
FHA Suspends 90-day Flip Rule
http://activerain.com/blogsview/553817/fha-suspends-90-day-rule-but-will...
News broke today that FHA will be temporarily waiving a rule that has been impeding bank resale of foreclosed properties.
The so-called "90-day rule" was implemented to stop property-flipping schemes that utilized multiple investors to rapidly increase the value of a home, while stripping that value out through larger and larger mortgages. This scheme hurt many individual homeowners who were often left holding the bag on loans, although in many cases the final purchaser was often complicit in the fraud, receiving a portion of the proceeds as compensation for ruined credit.
A side effect of this rule has been a substantial delay in the ability of foreclosing lenders to resell to borrowers wishing to use FHA-insured financing. Because of this rule, a lender must have taken title a minimum of 90-days before contracting to sell to a new homeowner. With the temporary waiver, that delay is now eliminated.
Of course, not all bank foreclosed properties are eligible for FHA financing, not only due to the now waived 90-day rule, but more frequently due to the condition of those properites, and the banks unwillingness to make required repairs. Of specific note is the standard FHA requirement that all insured homes be owner occupied. All the same, this change will have significant and immediate impact.
Of important note is that this rule change does not apply to all sellers. According to one article, the waiver will only be allowed for banks, and other property disposition companies acting on their behalf. Investors who purchase properties, repair them, and then resell ("Fix-and-Flip"), would not be eligible for this exemption.
Four out of 10 Recent Buyers Relied on FHA Loans, Says NAR
Washington, December 18, 2009
According to the most recent Realtors® Confidence Index, 39 percent of recent buyers purchased a home with a Federal Housing Administration-insured loan. Realtors® who took part in the November survey also reported that the number of first-time home buyers continued to climb to 51 percent.
“FHA helps provide affordable mortgage financing to homeowners, particularly first-time home buyers who are so important in drawing down inventory to help stabilize the current housing market,” said NAR President Vicki Cox Golder, owner of Vicki L. Cox & Associates in Tucson, Ariz. “These recent survey results reaffirm that, despite its current challenges, FHA is a critical part of the American housing fabric.”
The RCI results also indicated that distressed sales increased to 33 percent of all home sales last month, and that both investors and first-time home buyers are competing for these properties. The preponderance of distressed properties on the market has also influenced buyers’ perceptions of other homes for sale. Realtors® report that many buyers have pricing expectations that treat every property as if it were in foreclosure.
In addition, Realtors® expressed ongoing concerns with the impact of the Home Valuation Code of Conduct on recent appraisals. According to some survey respondents, inexperienced or out-of-area appraisers continue to rely heavily on sales prices of distressed properties, even when other comps are available.
“As the first, best source for real estate information, Realtors® have their finger on the pulse of current housing trends, and their knowledge and experience offer valuable insights into today’s real estate market,” said Golder. “We know that an economic recovery is not possible without a housing recovery, and we will continue to work with policymakers at all levels to ensure that this happens.”
The RCI is a key indicator of housing market strength based on a monthly survey of more than 50,000 Realtors®; in a typical month there are more than 3,000 usable responses. Participants are asked about their expectations for the demand for homes, price of homes, and other economic conditions.
The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries.
If you would like the chance to work with me or one of my fellow real estate investor coaches and our advanced training programs, give us a call anytime to see if Dean's Real Estate Success Academy and our customized curriculum is a fit for you. Call us at 1-877-219-1474 ext. 125
Hi Drew,
I have a quick question for you about FHA. Can a person who has co-signed on another mortgage apply for FHA on his/her first property?