BREAKING NEWS from the U.S. Department of Housing and Urban Development (HUD)
For those of you recently searching around for Las Vegas Homes For Sale.. you may have noticed an increase in the number of homes available for sale that are not Short Sales or Bank Owned Homes that are flips.
These properties have been popping up being offered for sale by Cash Rich Investors that have purchased Bank properties at the Trustee Sales or various other means such as bulk deals. Throw some lipstick on them and put them right back up for sale for a nice little profit.
No dealing with a bank for an answer… Great, Right??
Well… Great until you see the 90 day flip rule disclosure and no FHA loan buyers accepted. Great if you are a cash buyer or know of one of the few lenders that will lend on these flips. Bad.. if you are one of the many buyers out there that need an FHA loan to purchase or have the wrong lender to begin with.
Just Announced today (01/15/10) by the U.S. Housing and Urban Development (HUD):
“With certain exceptions, FHA currently prohibits insuring a mortgage on a home owned by the seller for less than 90 days. This temporary waiver will give FHA borrowers access to a broader array of recently foreclosed properties.
“This change in policy is temporary and will have very strict conditions and guidelines to assure that predatory practices are not allowed,” Donovan said.”
Basic Rules of Eligibility:
The waiver will take effect on February 1, 2010 and is effective for one year, unless otherwise extended or withdrawn by the FHA Commissioner. To protect FHA borrowers against predatory practices of “flipping” where properties are quickly resold at inflated prices to unsuspecting borrowers, this waiver is limited to those sales meeting the following general conditions:
- All transactions must be arms-length, with no identity of interest between the buyer and seller or other parties participating in the sales transaction.
- In cases in which the sales price of the property is 20 percent or more above the seller’s acquisition cost, the waiver will only apply if the lender meets specific conditions.
- The waiver is limited to forward mortgages, and does not apply to the Home Equity Conversion Mortgage (HECM) for purchase program.
More details for eligibility Requirements can be found here.
This is BRAND NEW Information that I wanted to get out now that could be Extremely good News for Cash Investors and good for FHA buyers that want to get into properties now…. without waiting for months of Bank Bureacracy to even get an answer.
I’ll be studying this a little closer, discussing it with my Fantastic lenders and going over it in the next post with more details.
Paul Francis, CRS | Prudential Americana Group – Realtors® | 702.592.3058
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