This temporary waiver will give FHA borrowers access to a broader array of recently foreclosed properties. The policy change will permit buyers to use FHA-insured financing to purchase HUD-owned properties, bank-owned properties, or properties resold through private sales. This will allow homes to resell as quickly as possible, helping to stabilize real estate prices and to revitalize neighborhoods and communities.
The waiver is effective for one year starting Feb 1, 2010. To protect FHA borrowers against predatory practices of "flipping" where properties are quickly resold at inflated prices to unsuspecting borrowers, this waiver is limited to those sales meeting the following general conditions:
- All transactions must be arms-length, with no identity of interest between the buyer and seller or other parties participating in the sales transaction.
- In cases in which the sales price of the property is 20 percent or more above the seller's acquisition cost, the waiver will only apply if the lender meets specific conditions. These specific conditions include but not limited to ordering 2nd appraisal and/or a Property Inspection Report.
- The waiver is limited to forward mortgages, and does not apply to the Home Equity Conversion Mortgage (Also called HECM or Reverse Mortgage) for purchase program.
If you are a First Time Home Buyer in the San Francisco (SF) Bay Area and would like to know more about how FHA loans can help you realize the dream of Home Ownership, please call me at 408.905.6261 or email me at Shashank@ArcusLending.com
Mortgage Broker/Banker | San Jose, CA
(408) 615-0655 | Shashank@ArcusLending.com
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