What’s the deal here…
Buyer: So I’m seeing a new home (detached and attached) which would qualify condition wise, complex approved for FHA sales and so on. Why is the listing agent saying no FHA offers for at least 90 days?
Check out the Housing and Urban Development site for all the details.
But basically it’s likely a “flipper” or investor purchased home on the “court steps” at a deep, “cash-only” discount… then cleaned up and re-listed the property. FHA will not provide a loan on this home until it has been owned for at least 90 days. Conventional, VA and other loans don’t have this requirement. But it sure makes it very difficult for the large FHA buyer pool to purchase these homes.
** FHA buyer suggestions: When limited to the FHA loan and wanting to purchase a home… Search market time in the MLS in the 30-60+ days and/or cross reference with the recorded sale date in tax records. Keep in mind an escrow can take 30-60 days. So if you work a deal before you’ll want to work with the lender/agent while under-contract so they hold off on appraisal or paperwork submittal to FHA till after the 90 day time. Large initial 3% (based on sale price) deposits will help the seller feel comfortable about a longer escrow and may give you the opportunity to beat out another offer **
These “flipper” or “court steps sales” are dominating the resale market currently. Look for additional updates shortly on additional steps, concerns, and valuations of these homes.
For additional information contact reo@lundteam.com or call 760.438.0800. Thanks.
Thu, Dec 17, 2009
Education