FHA Admits They are Hindering the Real Estate Recovery

The FHA has finally come to the realization that many investors buying and fixing foreclosures are taking much less than 90-days to rehab their homes.  Good rehabbers can actually have an ugly house ready for occupancy less than 30 days after its purchase.  So beginning February 1, 2010, the FHA is suspending the 90-day resale restriction imposed on sellers selling to buyers using FHA insured financing.

In order to re-sell a home to a FHA buyer in under 90 days, the following conditions must be met.

This chart was created using the information listed in the Waiver of Requirements of 24CFR 203.37a(b)(2) which is located on the HUD website at http://www.hud.gov/offices/hsg/sfh/waivpropflip2010.pdf.

Here are two more points not listed in the chart.

1. The 90-days flip restriction waiver will expire one… Read the rest

The #1 rule is to actually be there!  If you, as the real estate investor, cannot make it to the appraisal, then send your partner, construction manager, or reschedule if permissible.  A bad appraisal or a failed inspection can be the difference between a transaction closing or falling apart or weeks of delays being incurred while waiting for another home inspection from the section 8 inspector.  A section 8 tenant will not always wait around for a failing property to pass its inspection when there are a handful of other rehabbed homes readily available for rent.  Similarly, a bad appraisal may scare off potential buyers or reduce the amount funds available for an investor’s cash out refi.

Bring Favorable Comps to the Appraisal

Whether the property needs to appraise high or low, find the three most favorable comps… Read the rest

Home Buyer Tax Credit Update

The Senate has passed a bill to give homebuyers another three months to close on their homes and receive tax credits up to $8,000. The Tax Extenders Bill would apply to homebuyers who met the April 30, 2010 deadline with a signed contract to purchase a new or existing primary residence. The amendment would extend the deadline to September 30, 2010 for homebuyers to close on their real estate transaction. The previous deadline was June 30, 2010. The bill now goes to the House of Representatives, where it is expected to pass.

The National Association of Realtors estimates that as many as 180,000 homebuyers have qualified for the tax credit and met the contract deadline of April 30, 2010, but might not be able to close their transaction by the June 30, 2010 deadline due… Read the rest