Just when you thought there was no where to turn – Home Buyers, Home Sellers, Home Investors – HUD just gave a nice boost for California FHA insured mortgages. The 90 Day Flip Rule that hindered FHA buyers and certain home sellers from going into contract together has been temporarily waived for 1 year.
Starting February 1, 2010, a home purchased by a LLC, Trust or by owner within the last 90 days will be available to purchase for a FHA buyer. Until recently, FHA buyers had limited purchase power – now there are no limitations as to what property a buyer can go after. And a seller doesn’t have to bypass that strong FHA buyer any longer.
Of course all things from the Government must have conditions:
- All transactions must be at Arm’s Length meaning no interest between buyer and seller, and the lender will ensure there’s no funny business.
- Limited to Forward Mortgages and does not apply to the Home Equity Conversion Mortgage (HECM) for purchase – so no Reverse Mortgages
- In cases where the price on a home goes up 20% from the previous sale within 90 days, there better be some serious justification for that increase in price.
- a drab house with a fresh coat of paint may not be enough
- supporting documentation will be needed to show the word done that helped increase value (i.e. receipts, work orders)
- a Property Inspection will be imminent
- a 2nd appraisal may be required to validate the first appraisal and uphold the increase in value (and yes, the buyer would be responsible for the 2nd appraisal)
For the Home Investor this is a big win – you are no longer limited to conventional or cash buyers.
To the FHA buyer, it’s obvious, there are very few limitations.
To all others out there – the foreclosure crisis is immense. This temporary relaxation in the rules gives an opportunity to get rid of more properties including private sales.
This will help create market conditions that will help homes sell quickly.
This will help stabilize real estate prices.
This will help stabilize neighborhoods and communities.
Read the Full FHA Waiver.
Top 5 California Mortgage Links / Articles / Questions
- California First-Time Home Buyer Frequently Asked Questions
- California Mortgage – How Much Can I Borrow?
- What Are The Current Mortgage Interest Rates?
- Applying For A California Mortgage – What Documentation Do I Need?
- How Does The Mortgage Approval and Funding Process Work?
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{ 1 comment… read it below or add one }
That’s a great video you made for the 90 seasoning rule being waived.