FHA Waives 90 Day Flip Rule

GREAT NEWS!! FHA Federal Housing Commissioner David H. Stevens waived the 90 day flip rule for 1 year.
This is GREAT news for Investors and Buyers.
Previously if an investor purchased a property, a buyer with a FHA loan was not allowed to purchase the property until the 91 day. This rule was always a burden for the typical First Time Home Buyer because they were not allowed the opportunity to purchase the property within the first 90 days.
With Inventory so low and a large pool of buyers and everyone bidding on the few properties that are available it didn't seem like the FHA buyers had a fair shake at purchasing properties. Investors also suffered by having to sit on properties for the 90 days which increased their holding costs and also hindered the investor on purchasing other properties to fix up and resale as a result.
This waiver will help many home buyers find affordable housing and contribute to the stabilization of neighborhoods hit hard by foreclosures.
The waiver, which takes effect Feb1, 2010 is limited to the following conditions:

1. All transactions must be at arms-length, with no identity of interest between buyer and seller or other parties participating in the sale.
2. Certain conditions are required if the sales price is 20% or more above the seller's acquisition cost. (see details at the link below)
3. The waiver is limited to forward mortgages and does not apply to the Home Equity Conversion Mortgage (HECM) for purchase program.

For details on those conditions and further information directly from the source at HUD, go to the link at our Corona Real Estate and Inland Empire Real Estate website: Robert and Christy Real Estate Investor Help

Housing & Economic Recovery Act

Higher permanent loan limits for conventional conforming and FHA will become effective Jan. 1, 2009; the Act calls for limits to increase to a maximum amount of $625,500, depending on the metropolitan area. Note: The temporary limits established in March will expire on Dec. 31, 2008.

§ FHA floor limits will remain the same at $271,050.

§ The VA guaranty will increase.

§ Minimum cash investment for FHA loans will increase to 3.5%.

§ A moratorium on risk-based pricing for FHA loans will go into effect Oct. 1, 2008.

§ Seller-funded Down Payment Assistance Programs with FHA loans will be terminated Oct. 1, 2008.

§ Condo processing for FHA loans will be streamlined.

§ FHA reverse mortgages (HECM): changes, among others, include higher loan limits, availability with purchase transactions, and a modification to the origination fee.

FHA lifts 90 day flipping rule on foreclosed homes

HUD has announced that in order to help foreclosed properties be immediately marketable they will lift the 90 day flipping rule for the term of one year.

This allows properties marketed and sold by property disposition firms on behalf of lenders to be sold without the 90-day waiting period.

This does not include properties which have transferred to others in non-foreclosure transactions.

The news release is available for viewing at www.hud.gov/news/.

Senate Passes Stimulus Package -- Final Bill Includes Increased Loan Limits

Senate Passes Stimulus Package -- Final Bill Includes Increased Loan Limits

Thanks in part to the lobbying by C.A.R. and NAR members; the Senate passed their version of an economic stimulus package on Thursday, February 07, 2008. The Senate version expands rebate checks for seniors and disabled veterans and includes the same increases to the conforming loan limits for both GSE and FHA found in the House stimulus package. The House has already announced that they plan to vote on the Senate version of the stimulus package and expect to quickly pass the stimulus package with a bipartisan vote. The President is expected to sign the legislation early next week, ahead of the Congressional self-appointed deadline of February 15th. The increase in the conforming loan limits will last through 2008, but C.A.R. and NAR continue to lobby for FHA and GSE reform, making these increases permanent.

The U.S. House of Representatives passed a stimulus package last week that raised the FHA and conforming loan limits to as high as $729,750 in high-cost areas. By increasing the loan limits, borrowers will see immediate relief with new liquidity in the mortgage market and the nation will see an additional 300,000 home sales. Research shows that an increase in the FHA limit would enable an additional 138,000 Americans to purchase homes, and 200,000 families to refinance their homes safely and affordably.

Increasing the FHA loan limits is critical to bolstering California’s housing market. Current law restricts FHA loans to levels well below the median home price in many areas of the country and caps loans in high cost states at $363,790. These limits are preventing many homebuyers from using FHA to purchase or refinance their loan. The proposed provision will increase FHA loan limits nationwide by raising the floor to $271,050 and the limit to 125% of local median home prices.

Additionally, raising Fannie Mae and Freddie Mac’s (GSEs) conforming loan limit will provide immediate relief to borrowers and alleviate downward pressure on current housing markets. For instance, increasing the GSE loan limit could result in more than 300,000 additional home sales and strengthen current home prices by 2-3%.

The critical role that GSEs play in providing liquidity to the mortgage market has never been more evident than it is today. The national subprime meltdown has had a dramatic impact on both the cost and availability of mortgages in many markets. Since August 2007, the interest rates for jumbo borrowers have been more than 1 percentage point higher than conforming loans, which can cost homeowners up to $400 month in higher interest payments.