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FHA Waives Anti-Flipping Regulations
FHA(Federal Housing Authority) typically does not insure a mortgage on a property if the seller hasowned the property for less than 90 days. However, they waived this rule in 2010, extended into 2011, and now have re-extended until the end of 2012. The hope is for this to allow these homes to sell as fast as possible and helping to stabilize prices in neighborhoods with high foreclosure activity.
Since FHA allowed this program to occur in February 2010, FHA has insured nearly 42,000 mortgages.
Article from DCS News.
Who is buying those REO’s?
REO’s(real estate owned) are also referred to as Bank owned properties. In a recent article by Inman News regarding Fannie Mae, Freddie Mac and FHA, the three are selling houses faster than ever. Fannie Mae had 162,489 houses in it’s stock in January, as of November 1, they were down to 122,616. 60% of those sales were to owner occupants or non-profits.
Freddie Mac has sold close to 80,000 REO’s in the first 9 months of 2011. 70% of those units have been purchased by owner occupants with an average discount of 6%. In the fiscal year(ending Sept. 30, 2011) FHA set an all time record in selling 102,195 REO homes.
Many REO properties have waiting periods on when a non-owner occupant can have their offer accepted, ranging anywhere from 5-15 days depending on the bank or agency. In addition, to encourage owner occupants to purchase, incentives are offered on many properties in the form of low down payment programs and closing cost credits.
