Because of the dramatic rise in foreclosures, FHA has decided to temporarily waive one of its eligibility property requirements for certain distressed areas. Effective September 14, 2009, FHA has decided to waive the 90 seasoning requirement for FHA insured properties in NSP eligible areas.
This is great news for NSP buyers because typically, NSP areas are established simply because the foreclosure rates are incredibly high in these areas. The whole purpose of the NSP is to revitalize these areas with first time buyers.
Unfortunately, many of the foreclosed properties in these NSP eligible areas are being scooped up by all cash investors and then become ineligible to FHA buyers for 90 days.
More often than not, these properties are then purchased by either another cash investor or a conventional buyer within 90 days, thereby completely shutting out the FHA/NSP buyer. I want to also mention that while this new guideline applies to NSP eligible properties here in LA county, it really only applies to NSP LIPA buyers. It does not apply to standard NSP buyers.
This temporary waiver of the 90 day seasoning rule will only be in effect for one year and will expire on September 13, 2010. I have already contacted my NSP buyers and their Realtors to let them know what this means for them.
Los Angeles REO Listing Agents & Sellers: You can now consider FHA purchase offers on those properties that you've just purchased recently.
Los Angeles NSP Buyers: You are no longer disqualified from making offers on foreclosures that were just recently purchased by an investor.
Buying a home is one of the most important decisions someone can make, right up there with getting married and starting a family. Today's real estate market can be really scary, which is why it's important to get as much information as possible before starting your search. The pre-approval process is a relatively simple process (collecting your documentation is the hardest part).
So if you have any questions and/or concerns, please feel free to contact me. That's what I'm here for and I would love to be able to assist you in your search for an affordable home loan.
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