Question on seasoning in NJ
Hello everyone. I'm hoping to complete my first rehab in the next few months, and have been looking into how I will finance the deal. I have been in contact with the mortgage rep I used to purchase my current home, and she had this to say about financing rehabs...
"You must carry the mortgage for at least six months, unless you get a cash buyer. Banks requiring seasoning of a property for at least 6 months, and some banks require 12. This means that the person buying the home must use the seller's purchase price if the sale is taking place within 6 months (i.e. no profit for you)."
I was surprised to see this, since I've read a lot on this forum about the 90-day seasoning requirement. I asked specifically if this applied to FHA loans, and her response was...
"FHA buyers have to prove you invested the money to get to your sale price. You have to supply invoices and receipts, and you are capped at 10% profit for 6 months"
I will visit some other small local banks to get a second opinion, but wanted to see if anyone had run into anything like this.
Thanks in advance!