Turns out, the Federal Housing Administration (FHA) has been keeping close tabs on the market trends lately. One notable trend is that regarding investment properties.
In the past, there was a rule requiring a homeowner or investor to own a home for a minimum of 90 days prior to selling. Though the initial intent to reduce predatory investments was commendable, in this marketplace it was preventing honorable investors from placing affordable homes on the market.
This dilemma creates other concerns such as the negative affects of homes sitting vacant for months at a time, the inability of homebuyers being able to purchase a home. Not to mention the corruption that could take place to find loopholes around the rulings or other underhanded circumstances.
The current ruling is termed as a "waiver" of the FHA regulation stating that a property must be held for 90-days prior to a new sale.
So, what does this mean for homebuyers?
In our minds, this provides a tremendous opportunity for first-time homebuyers especially. A key factor to consider is that many investors are finding homes where they can purchase for a very low price, complete some updates and then place the home on the market. These investors are typically pretty smart about their pricing as they want to avoid long term ownership once repairs/updates are completed. Thus, homes placed back on the market are generally lower than that of the area anyway. For a homebuyer, this presents an opportunity for great savings not only with the price itself but also with the fact that the home will most likely have had recent updates. All leading to more cash kept in the homebuyers pocket.
When you couple these savings with that of the tax credits ($8,000), it truly is a disservice to yourself not to partake.
We would like to point out there are a few qualifications that a property/investor must meet in order to allow the FHA waiver. You can read more about the waiver here: http://www.hud.gov/offices/hsg/sfh/waivpropflip2010.pdf
Comments(0)