Yes, correct. Sort of… I think originally, the 180 days was hard and fast… but shortly thereafter they allowed sales between 91 and 180 days, but a 2nd appraisal was mandatory… and it could not be at buyers expense.
Now, as long as the profit on a resale of 91 to 180 days is not 100% or greater, then there is no 2nd appraisal req’d. That is the biggest diff, as far as I know. Of course there are now many who are excluded from the restrictions, such as lenders who buy back their own secured props.
FHA used to restrict insuring the sale of any home that had been resold within the prior 6 monh period… period, no exceptions. Now the time limit has been reduced to 90 days, and there are some exceptions, but you wouldn’t fit those with a Land Trust.
Essentially the date the property was transferred to the trust is the conveyance date. If it is within 90 days, then you cannot contract with a purchase for an FHA insured loan until the 91st day. Between 91 and 180 days they may require a 2nd appraisal, (at the sellers expense) if you are selling for more than a 100% profit. This sometimes happens when a rehab is done, or in your case where there is likely 0 amount shown for conveyance of the property… which could trigger additionl documentation on the part of the appraisals.
Other than that I haven’t heard any other restrictions that would apply to a land trust scenario. You will at times run into a title company who will want the property conveyed from the trust to the benefical interest of the trust (personally) then conveyed from that person to the purchaser. Not sure if this would start the FHA clock all over again… or it they would have you do such a thing. If so, this could be a problem… and what you will find is even thought FHA has all these rules, many times no two transactions are done quite the same way…
Re: Title seasoning for FHA - Posted by Natalie-VA
Posted by Natalie-VA on July 17, 2008 at 13:07:55:
Hi JT,
There was no change, that I’m aware of, from 6 months down to 90 days. What happened (in June 2002 I think), was that they wouldn’t do anything less than 91 days (except for REOs). From 91 days to 6 months there was additional documentation needed. Over 6 months was no problem. That’s my recollection, anyway.
The 180 days was amended to 90 days, along with other changes… As long as the sale of 91 days is not for beyond a 100% profit of the previous purhase price, then NO 2nd appraisal required.
Re: June 7, 2006 HUD amended regs - Posted by Natalie-VA
Posted by Natalie-VA on July 21, 2008 at 12:11:54:
Hi again JT,
They may have changed some of the underwriting requirements in 2006, but I am 100% positive that 91 day sales were allowed prior to this. I sold a few houses to FHA buyers under those guidelines between the original change (2002 I think) and 2006.
I guess it really doesn’t matter since we’re in agreement as to where it stands today.