The Federal Housing Administration announced last week that they are extending the temporary waiver of their “anti-flipping” regulations through 2012. This is good news for investors seeking to buy, rehabilitate and quickly sell (flip) homes as it expands their pool of potential buyers. Originally waived by the Obama administration in February 2010, the regulation had prevented buyers from using FHA insured loans to purchase homes which had been owned by the seller for less than 90 days. The FHA hopes that by extending the waiver one more year, “It will allow homes to resell as quickly as possible, helping to stabilize real estate prices and to revitalize neighborhoods and communities.”
Since 2010 when the waiver first took effect the FHA has insured more than 42,000 mortgages on homes sold within 90 days of acquisition. Those mortgages were worth more than $7 billion. The press release doesn’t offer any predictions as to how many flipped homes this extension could affect during 2012.
Sellers are not the only people who may benefit from the extension of the waiver. In our experience, a majority of the homes that will be affected by the extension of this waiver are those at the lower end of the price spectrum in their respective markets. Who buys the least expensive homes? A large portion of the market is “first timers” who often use FHA insured mortgages. The problem is, first time home buyers often barely have enough cash for closing costs and a down payment and few lenders will allow them to finance repairs that will be made after closing. With a house being flipped by an investor, the repairs have already been done and can be financed as part of the purchase price.
Whether you are an investor or a first time buyer we can help you find the perfect house to buy. Call Becky Seim a today for a complete list of available homes in your price range.
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