Posted by Willie on August 15, 2003 at 05:47:37:
If this is the case, it could have a significant impact on flippers. I see no logic for it, except for some pie in the sky bureaucratic idea to possibly prevent fraud (which it won’t). The loan for the new purchaser should be based on the FMV of the property and the qualification of the mortgagor, not on the flipper at all. I would think any such policy on HUD’s part will probably in time end up in a court case and repeal.
New HUD rule (so i’ve heard anyway). - Posted by Arthur
Posted by Arthur on August 13, 2003 at 19:44:20:
Can’t say this for 100%, but i thought i would mention it here and see if anyone else heard the same thing.
Apparently, HUD won’t let investors sell properties that are aquired from HUD for 180 days after they purchase it. This is a new rule that was told to me by someone who works for another similar government agency.
Re: New HUD rule (so i’ve heard anyway). - Posted by Dave T
Posted by Dave T on August 16, 2003 at 20:02:19:
The new HUD rule you refer to is designed to slow down and maybe prevent the loan fraud that facilitated many quick flips.
Under the new HUD rule, your buyer is prohibited from using FHA financing to purchase your property until you have been on title for 90 days or more.
Between 90 days and one year of title seasoning, an FHA loan to your buyer is still possible, but you have to justify your profit. Two independent appraisals may be required.
After one year of title seasoning, there are no FHA restrictions.
Additionally, your buyer can not get an FHA mortgage to purchase from you if you are not the titled owner. This would limit your pool of eligible buyers in a sandwich lease, or when reselling if you purchased on a contract for deed.
Re: and finance through HUD (NT) - Posted by Arthur
Posted by Arthur on August 13, 2003 at 21:40:19:
Well i was told it was a new rule that would affect the investors…do HUD provide funding to investors? I thought they dealt with low income families or that type of thing…or was my informer mis-informed?
that’s not the point… - Posted by Robert
Posted by Robert on August 14, 2003 at 15:54:54:
you as an investor buy a property, any property including one from HUD. You sell it BEFORE 6 months are up. Your buyer can’t get a FHA mortgage because of the new rule. Get it?
Some investors/flippers deal with nothing but FHA on the back end so this would have a tremendous impact.
Call HUD - Posted by qstaff
Posted by qstaff on August 13, 2003 at 23:29:40:
If you flip a a house within 180 days after purchase, I’m pretty sure the house can no longer be financed through FHA, but I don’t know if they call in the loan.Call HUD because they spell it all out, but FHA is weird. They don’t give to investors per se, but if an investor needs a place to live, FHA is a great place to get a loan because it’s cheap. Also you can get FHA loans in certain designated neighborhoods if they are owner occupied.