Jarad here and there is some BIG NEWS today.
FHA announced that they have suspended their 90 day rule beginning 2/1/10. This is beyond huge for investors because we can now sell properties to FHA buyers without having to season the title for 90 days.
There is a HUGE inventory of FHA buyers, in fact most first time home buyers use FHA because of the simpler lending requirements and lower down payments. And since a lot of deals we are seeing are entry level homes it makes for a perfect fit.
See it was difficult there for a little while because FHA refused to finance a deal if the seller was not on title for at least 90 days or longer which prevented a ton of first time home buyers from getting into these entry level homes at affordable prices.
Now finally after 4 years they decided to lift that requirement, with a few minor exceptions like…
All transactions must be arms-length, with no identity of interest between the buyer and seller…
And the seller has to be on title at the time of close… etc. you can read about the waiver on HUD’s website.
This means anything is fair game now, Short Sales, REO’s, you name it!
So go out and start flipping those deals, you have no excuse now.
FHA guidelines for Short Sale
1. The borrower must be delinquent at least 3 months.
2. Net proceeds of the offer should be at least 82% of appraised value.
3. The appraised value should be at least 63% of the mortgage.
4. The mortgagor must be an owner-occupant.
5. There is verification of the borrower’s decrease in income showing inability to pay the mortgage.
6. The property was marketed in such a manner that an offer for fair market value could be obtained.
if the above ratios are correct am i to infer that my initial offer would be calculated as such: 100,000.00(is this current or original mortgage>)@ 63% = 63,000.00, 63,000.00 @ 82% = 52,290.00 (my initial offer. Please advise)