FHA Tip on Seasoning Issues - Don't Delay Closings

Bo - Habit is key, thanks for commenting !

Marc - Another great reason why FHA is king nowadawys :)

Richard - Thanks for stopping by!

Naoma - hehe thanks, glad you like it!

Rich - Great Question!!  A Seller that inherits the property does NOT have to wait the 90 day mark :)  Just recently had one ^_^

Tina - Thank you very much!  Yes a lot of co-workers have went through the same obstacle so I had to write about this post!

Sherri - Hi Sherri, glad to see a new face to my blogs.  Hopefully I can catch you before you had to call FHA connection ;)

Well here it is because I had one come up last month, great question!

Bank Owned Properties are ok to sell before 90 days

Mortgage Owned Properties are restricted to the 90 days

Mortgage Company owned by a Bank (i.e WellsFargo) are ok to sell

The rule written for the FHA guideline is VERY VAGUE regarding this transaction and 90% of the time relies heavily on the lender.  But the overall consensus is the above.

Hope this helps!!

Great Questions so far!!!  Keep em coming!

FOLLOWUP - A list of more exempted Sales provided by §203.37a: http://portal.hud.gov/fha/reference/ml2006/06-14ml.doc

· Sales by HUD of its Real Estate Owned

· Sales by other United States Government agencies of single family properties pursuant to programs operated by these agencies.

· Sales of properties by nonprofits approved to purchase HUD-owned single-family properties at a discount with resale restrictions.

· Sales of properties that are acquired by the sellers by inheritance.

· Sales of properties purchased by employers or relocation agencies in connection with relocations of employees.

· Sales of properties by state and federally charted financial institutions and Government Sponsored Enterprises.

· Sales of properties by local and state government agencies.

@ Mike - Seasoning is based upon how long have you had ownership for the house regardless if you have a mortgage or not.  You are right about a general vague rules they put forth and again its mainly relied upn the lender to make final decisions.

@ Jackie - The waiver applies to Foreclosed properties only.

@ Denise - well actually you can't even write a contract until the 91st day if the owner owned it less than 90 days.

@ Jeff - Thanks for commenting, I completely agree that there are still many questions out there why these guidelines are in place in the first place but the reasoning behind this is to prevent fraud.

@ Richard - thanks!

@ John - Good insight, who knows maybe the 90 day rule will be removed completely ,we will see.

@ Tina - Thanks for commenting and thanks for the compliment :)

@ Steve regarding Question - nope the new rule applies to foreclosed homes so your 90 day will be waived, see above for updated article.

@lane - Hello there. The seller's best interest is to get a new addendum to extend the financing otherwise you can walk away from the deal simply by stating this purchase doesn't qualify for FHA financing due to the 90 day rule.  I would ask the seller to get the addendum if he refuses then you can ask your lender for the denial letter due to the 90 day rule and show that to the seller to walk away from the contract.  The other option would be to get a conventional or va financing which requires no seasoning and get a new addendum for that.

@Jean

Hi Jean.  you can definitely get stating on the processing of the paperwork right now and the only stipulation is that it must FUND on the 91st day..so all and all you should be fine just can't close till then.

@Jean

Sure, feel free to call.  To answer your concern, its really up to all the parties involved, Yes you can start all the paperwork (I have before) KNOWING that you can not fund until the 91st day but can not sign the contract until the 91st day.  So what that means is get all the clients Income & assets together.  Get all required signatures & payoffs, have everything pre-ready so when its time on the 91st day, you will be ready.