Great news for buyers looking at foreclosures!
In the last few years the Federal Housing Administration (FHA) has created and enforced rules prohibiting FHA buyers from purchasing properties from sellers who had owned the property less than 90 days. This was to protect buyers from someone who might get a screaming deal from a kind old lady and then turn around and jack up the price to sell a month later when prices were climbing faster than the tide comes in. Today, because these predators are all but extinct in the current housing market, there is not much threat of being swindled by a “flipper”.
The newest problem affecting neighborhoods is foreclosed houses sitting empty, not being maintained or repaired, being vandalized and bringing down property values. Because of the rules about owning property at least 90 days even banks who owned these repossessed houses had to hold them for 90 days before an FHA buyer could buy them. Effective February 1, 2010 these houses no longer have to sit for 90 days waiting to be financed by FHA secured loans.
This will affect the majority of homebuyers in the U.S. because a large percentage of buyers only qualify for a loan underwritten by the FHA. FHA loans require a lower down payment, offer much cheaper mortgage insurance, and will allow a borrower with a slightly lower credit score to purchase a home. Think of it this way: non-FHA loans are for people who don’t need to borrow the money and FHA loans are for the rest of us.
Now, when banks foreclose on houses they can go in, assess the property, make any necessary repairs, and put the house up for sale right away instead of waiting 90 days so that it is available to all buyers. So if you are watching the foreclosure market waiting for your dream home to become available for you to purchase it you won’t have to wait as long thanks to the new changes in FHA lending laws.
Click here to see the Government’s Housing and Urban Development article on this subject.
For more information on buying foreclosures visit my blog, “Are Foreclosures Good Deals?” Are you a seller and want to take advantage of these new changes to lending laws? I have a blog to help you get your house ready for sale here and a blog about why your house hasn’t sold yet here.
Jessica Murr is a licensed Realtor in California serving the Shasta and Siskiyou County region in far Northern California. She specializes in luxury homes and developable land as well as commercial sales and leases. Her services to clients include 24/7 access and mastery of social networking to keep both buyers and sellers up to speed on every step the market takes. Jessica has established herself as the Online Real Estate Professional of Choice for all aspects of far Northern California Real Estate.
Jessica Murr
Realtor
530-941-6061 (Blackberry)
Richter Scale Real Estate
www.RealtorJessicaMurr.com
DRE License # 1777426
“I don’t follow Real Estate – I’m leading the way”
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