Lame FHA rule...

[hatterasguy]

Really lame, I guess when someone is buying a house from you with an FHA mortgage, they cannot close unless you have owned it for 90 days! WTF! The house in question we bought with cash, from an older couple who had it paid off 30 years ago. So their is no mortgage on our side. I knew about the 90 day rule but I thought it only applied if you bought a property with an FHA mortgage and tried to resell it.

That really sucks. So now my closing is being bumped back a week to comply. Not a big deal, but just a time waster.

 

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[tbsells]

I hope this is the only suprise you get on this deal. Often, FHA will require a second appraisal on properties being "flipped" between 91-180 days after purchase. They can be hard to deal with on properties where the resale price is significantly higher than the previous sale. Just another example of financing being available, but tougher to get.

 

[hatterasguy]

No were not flipping this house, just disposing of it. Were losing a bit of money on it actualy.

 

[hakrjak]

This is the FHA seasoning requirement.... I've never run into it because by the time I get a house fixed and flipped, the closing date has always been beyond 90 days from when I took ownership of it.

- Hakrjak

 

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[rxcknrxll]

yeah it's not a new rule. flipping, by most people's understanding of it anyway, does not work as expected in most cases (not that that's what you were doing...I understand what you're saying). you'll get her closed. tbsells is right; it's a good idea to make sure you have someone who's familiar with fha on your side of the table. fha is pretty much how anyone's buying an owner occupied home from what i've seen. You have to know that loan inside and out, and particularly the players in your market. It still matters knowing the appraiser and such.

 

[imirza]

I ran into that 90 day rule recently too. Sold a property I had bought and rehabbed to an end buyer who used an FHA loan. Had to wait 90 days. Bought the House July 22nd and sold it December 4th. I was able to get the buyer to rent the home from September onwards until they bought it. The new purchase contract has to be dated 90 days after the previous close. So the buyer signed the purchase contract in late October. The FHA process took pretty long thought the appraisal came in above sales price.

Personally I don't think this 90 day rule is a big deal. And you only need a 2nd appraisal if the property is being sold 100% above previous sale price. You can always get the buyer to move in the house and rent it prior to purchasing it. Obviously you will need some documentation whereby they cannot have buyers remorse once they move in. You can also take a non refundable deposit from them which is what I did in case they decided to back out of the actual purchase.

 

[imirza]

I've yet to see this come up. In the two cases where I sold FHA within 90 days, the Purchase and Sale Agreement was signed within the 90 day period, but the closing was after the 90 days (actually, in one case, the closing happened before the 90 days...I guess the lender didn't catch it).

Where have you heard that the Purchase Agreement can't be signed before 90 days?

My bad. It doesn't have to be after 90 days. We signed a new contract because we had changed something else that had nothing to do with FHA. For some reason I had thought it had to do with FHA. Nevermind.

 

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[hatterasguy]

Well in my area we usualy don't have to deal with FHA much, since most of the stuff is way over what FHA will lend on. But in this market we do, and were not used to it. Luckly my attorney is, and I am somewhat having come from the RE sales side. This instance surprised me because I was under the impression that the 90 day rule only applied if you had an FHA mortgage on the property you were trying to sell.

When we buy lots we sometimes have to get rid of the used house they come with if we don't keep it as a rental. Dumping them fast is nice.

Overall its not a big deal, its just annoying.

All I can say is dealing with cheap property sucks, I can't wait for the market to improve so I can move up into the $500k-$1.5 price range. Nobody in the under $300k range has any money, they are crying over a little radon system, and some broke windows. The last $650k new construction my uncle sold closed in a month and they put half down in cash.

 

[rxcknrxll]

Well in my area we usualy don't have to deal with FHA much, since most of the stuff is way over what FHA will lend on. But in this market we do, and were not used to it. Luckly my attorney is, and I am somewhat having come from the RE sales side. This instance surprised me because I was under the impression that the 90 day rule only applied if you had an FHA mortgage on the property you were trying to sell.

When we buy lots we sometimes have to get rid of the used house they come with if we don't keep it as a rental. Dumping them fast is nice.

Overall its not a big deal, its just annoying.

All I can say is dealing with cheap property sucks, I can't wait for the market to improve so I can move up into the $500k-$1.5 price range. Nobody in the under $300k range has any money, they are crying over a little radon system, and some broke windows. The last $650k new construction my uncle sold closed in a month and they put half down in cash.

Just last night I wrote a quick rant about how the market's not gonna make the rebound so many are hoping for. I'd appreciate your thoughts. I posted it on Active Rain here.

 

[hatterasguy]

Sure, I have faith in the country, and more so in Fairfield county, so I know it will come back. It will just take time.

We havn't seen the crazy price drops that other parts of the country have seen, things have dropped but not nearly as much.

 

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[hatterasguy]

Just last night I wrote a quick rant about how the market's not gonna make the rebound so many are hoping for. I'd appreciate your thoughts. I posted it on Active Rain here.

I wrote a good response but didn't do some logo thing and lost it.