On Friday, January 28, 2011 HUD announced the extension of the 90 day seasoning waiver.

Here are the 4 things you need to know about this waiver.

  1. The extension is effective for all sales contracts executed on or after 2.1.11 through 12.31.11, unless otherwise extended or withdrawn by FHA.
  2. All transactions must be arms-length, with no identity of interest between the buyer and seller or other parties participating in the sales transaction. The following may be grounds for denial of the file if deemed to circumvent the arms-length rule:

          A. Seller on contract does not hold title to property

          B. Property is being sold by an LLC, Trust, or Corporation

          C. A pattern of flipping exists with subject property within last 12 months, and

          D. Property was not marked openly and fairly.

     3. In cases where the sales price of the property is 20% or more above the sellers acquisition cost, the waiver will only apply if the lender follows these criteria:

          A. Justify the increase with supporting documentation and/or a second appraisal.

          B. Provide a home inspection report to the borrower (borrower can be charged)

              1. Inspector can only be paid by the lender

              2. Inspector cannot have an interest in the property or a relationship with the seller

              3. Inspector cannot pay a referral fee

              4. Inspector cannot receive payment for recommending a contractor for repairs

     4. The waiver is limited to forward mortgages, and does not apply to the Home Equity Conversion Mortgage (HECM) for purchase program.

Stay Tuned for Investor Overlays!

 

 

Respectfully,

Ron W. Kelleher

Licensed Mortgage Planner

Email

Financing Available

                                                                

 

2 Comments on FHA Extends 90-Day Seasoning Waiver

JAN
31
2011
Outside Blog

Thanks for the post.

They really just need to eliminate this seasoning requirement permanently, and lets get these properties sold and occupied as fast as we can. 
4:02pm • #1
2 Featured Posts Outside Blog

Ron,

Thanks for writing this so well.  I just re-blogged it, and suggested it. 

Fritz - I couldn't agree more!

All the best!
4:03pm • #2


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Ron

Ron Kelleher - FHA, VA, Conventional, and Jumbo Home Loans in Arizona

Scottsdale, AZ

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