FHA Lifts 90-day waiting period
HUD announced that they will allow purchasers using FHA loans to buy properties that have been owned less than 90 days by the sellers. This should help homebuyer's to secure homes that they have been unable to make offers on. Since a lot of flipping is going on in the Nothern Virginia Real Estate market there are many properties that are not available to homebuyers who are buying with FHA loans. I have definitely seen an increase in flipped properties in the last month. The investors are definitely out there in the market place turning around properties in less than 90 days.
Below is additional details provided by Inman News -
Starting Feb. 1, housing regulators will suspend for one year a 90-day waiting period on property resales that it says has put FHA borrowers at a disadvantage in bidding on foreclosed properties.
The waiting period on FHA financing of resales was implemented in 2003 to protect the Federal Housing Administration's mortgage insurance program from the impacts of home flipping.
The policy did not apply to properties repossessed by Fannie Mae, Freddie Mac, or state- and federally chartered financial institutions. In 2008, FHA lifted the 90-day waiting period on resales of all bank-owned (REO) properties (see story).
Now, although many other conditions still apply, the waiting period is being lifted on all resales -- including properties purchased and rehabbed by private investors.
Research shows that acquiring, rehabilitating and reselling properties to prospective homeowners often takes less than 90 days, the Department of Housing and Urban Development (HUD) said in announcing the change.
Some sellers of foreclosed properties have been reluctant to enter into contracts from potential FHA buyers because of the cost of holding a property for 90 days, and the risks that a vacant property would be vandalized, HUD said.
Lifting the waiting period "will allow homes to resell as quickly as possible, helping to stabilize real estate prices and to revitalize neighborhoods and communities," HUD said.
Lenders must have supporting documentation or a second appraisal if the sales price of a property increases by more than 20 percent from the seller's acquisition cost, HUD said in publishing the waiver requirements. The waiver does not apply to the Home Equity Conversion Mortgage (HECM) for purchase program.
To begin your search for the perfect home or to sell your home in Northern Virginia, call Kim Darwaza at 703-856-2254. Please visit http://www.kimdarwaza.com to search the MLS for Northern Virginia listings.