Last Updated:
October 15, 2009
Ski / Snowboard Sites
HUD has some changes that are now in effect and upcoming as well. Anti-flipping policy – Until this month, an investor had a timing issue if they purchased a home, remodeled it, and then sold it. HUD would not allow a buyer to use an FHA loan unless the home had been owned by the seller/investor for at least 90 days from the date of seller’s purchase until the date of contract. Essentially meaning the investor had to keep possession for at least 4 months (1 month for buyer process) when oftentimes the buy/fix/sell process could be accomplished in 2 months or less. NOW, HUD has relaxed that 90-day rule and there is no time constraint on the seller/investor’s holding period. Effective with case numbers issued 4/5/10, the upfront MIP fee will go up from 1.75% to 2.25%. Currently the yearly MI renewal is .55% or .50%. It is likely that these will be modified in the next wave of changes. No info yet on what and when. Currently the downpayment requirement is 3.5% for a purchase. Going forward, if a buyer has a credit score lower than 580, their downpayment will be 10%. (note that MOST investors will not accept credit score less than 620) Currently the seller can pay up to 6% for closing points/costs/prepaids/etc. Going forward, that will be limited to 3%. All of these changes and upcoming ones are in reaction to increased foreclosures during the last 2 years, the perception that FHA is the alternative/A-/subprime loan these days yet still trying to keep the housing market moving forward instead of stagnating.
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