Fha Loans

7 Replies

We are about to sell our fist home and I am hearing if the buyer is using fha, the seller need their house in their name for 3 months. Is that correct?

Also, can I really Not sell the house over a certain percent above my coat?

I dont sell too many FHA homes but in the past I had done a lot of renovations to the home that justified the difference in price from when I purchased to when I was selling.

Regarding owning for 90 days, I am not 100% sure.  Either way bank financing is going to take 30-45 days so this should not be a big deal.

Originally posted by @Alfredo O. :

We are about to sell our fist home and I am hearing if the buyer is using fha, the seller need their house in their name for 3 months. Is that correct?

Also, can I really Not sell the house over a certain percent above my cost?

Really? Changed your mind so soon? Your Lender may well take the attitude that you ALWAYS intended to flip it quickly for a profit - which if you read the fine print of what you signed, could be classified as mortgage FRAUD!

Just follow their rules. There may well be EXEMPTIONS allowed - but you had better have a very convincing reason! (And if you "get away with it", I suggest: never try that again)! 

[Not legal advice]. Cheers...

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Thank you very much for the input. We are always about following the rules and doing what is right.

If it doesn't make sense or is not morally right we will never follow the trend. I am perhaps listening to some bad advice so I may have to move away from the people who claim to be on our side as we go through this process.

Originally posted by @Alfredo O. :

We are also using a hard money lender on this first property. Do they have certain rules that I should be aware of at this time?

You mean that you're buying it with even less than 3.5% down? Well, if the only reason you did that is because you thought you were allowed to flip it straight away, you got given bad advice.

On the other hand, how else could you get into your own home so quickly!

Largely, Hard Money Lenders make up their own rules (and interest rates - ouch!)...

Best get them paid out even quicker than your credit cards! All the best.

Hi Alfredo, yes, unfortunately, FHA requires that you own the home for 90 days before an FHA buyer can buy the house from you. They are trying to discourage flippers, but they are really sticking it to their buyers. We just had to turn down a buyer who'd been looking for a house for a year, even though her offer was the most attractive of the 10 offers we received. We would have had to leave the house sit empty for 1 extra month before I could even enter into contract with her, per FHA rules. It is a shame. Hard money lenders know you are not going to hold onto the house long term.... you are NOT DOING ANYTHING WRONG, or immoral. You are buying an ugly house at a low price., fixing it up (and employing many in the process) and selling it for a profit. Lots of people get paid behind what flippers do, contractors, their employees, realtors, landscapers, lenders, title companies....you get the picture. One thing you can do is make sure your realtor communicates with any FHA buyers' realtor. If they can qualify for a Conventional loan, even a 3% down Fannie Mae, then they can buy from you prior to the 90th day. Best of luck to you!!

@Alfredo O. , I apologize if I misinterpreted the "rules" you may or may not have been under when you "bought" your "first home". (Those words in quotation marks can have differing definitions).

eg. Perhaps your purchase Contract didn't have any selling restrictions; perhaps also, you always intended to assign/wholesale it from the start, and, you never intended it to be "your home"?

That's an interesting FHA-Lenders rule though, about who THEIR Borrowers can buy from!

So to all Flippers and Wholesalers: take note! Cheers...