By: Mark Wisterman
The number of buyers who are searching for their next home in the Lake Oroville real estate market is about to increase putting further pressure on home prices thanks to FHA.
Under this new program, which runs until September 30, 2016, someone who has lost their home due to an “Economic Event” or has filed for Chapter 7 or Chapter 13 bankruptcy due to an “Economic Event” can qualify for the purchase of a home with an FHA loan in as little as 12 months after the loss of their home or discharge of their bankruptcy.
Great news, for the Lake Oroville real estate market, and beyond is just coming across the newswires.
The Federal Housing Administration (FHA) is extending the waiver to the onerous rules that prohibit FHA insured loans from being used for the purchase of homes that sold within 90 days of being acquired by the seller.
Under the rule, if a seller has owned the home for less than 90 days and the sales price is more than 20% higher than what the seller originally paid for it, then FHA would refuse to insure a loan for it. Apparently FHA feels that it is “predatory” sales practice to make a profit on the sale of a property that you may have purchased at an opportune price.
With home sales sagging FHA decided last year to mostly waive the restriction on the practice of “flipping” through January 31, 2011. In other words, they decided that through January 31, 2011 they would allow the free market to work.
In a very smart move, with the expiration date of the waiver looming, FHA has extended the waiver for the balance of 2011. While there are still parts of the regulation which hinder the sales of flipped homes, the extension of the waiver is a wise decision and the FHA is to be applauded for its effort to free up the free market.
If the agency would prefer a standing ovation over simple applause, it should do the right thing by getting rid of the silly rule all together.
- Relaxed FHA ‘flip’ rules prove no flop (seattletimes.nwsource.com)
- Rehab Flips Making a Comeback During the Housing Bust? (seattlebubble.com)
- Doing Flips Without Falling Down (homeloans.org)