Mortgage Advice

In a housing market where tighter lending requirements have made FHA financing the only option for some buyers, this 90-day policy has prevented the quick resale of foreclosed properties, which affects the ability of communities to stabilize and rebuild. Research has shown that investors can buy, fix and resell foreclosed properties in less than 90 days. This waiver could help get things moving again!

The temporary waiver starts 2-1-2010 and will be effective for one year, unless extended or withdrawn by FHA. To read the waiver in it's entirety go to this link: 

                                             HUD Flipping Rule Waiver   
 

This is an excellent time to contact investor clients who have recently purchased a foreclosed property and those who may be on the fence about purchasing a forclosed and those who got out of the market because of the flipping rule. Add the first time homebuyer tax credit and it is a great opportunity for an early spring sales rally.

The waiver is limited to sales meeting the following conditions to insure FHA borrowers are protected: 

• All transactions must be arms-length; no identity of interest between buyer, seller or third parties.
• Sales w/ 20% increase over seller's acquisition cost will only be permitted if the lender provides documentation or 2nd appraisal which substantiates increased value.
• Waiver is limited to forward mortgages (no reverse mortgages) and cannot be used for HECM

"FHA borrowers, because of restrictions we are now lifting, have often been shut out from buying affordable properties", said FHA Commissioner David H Stevens. "This action will enable our borrowers, especially first time buyers, to take advantage of this opportunity."