FHA QUESTION

5 Replies

While I understand that that when dealing with an FHA Buyer, I must hold title to the property for 90 before selling it, my question is if the property has to be held for 90 before the property can close, or before the property can even be appraised by FHA? In other words I have a property that I have been made a "final and best" CASH offer at $108K (which would net me a paltry $3K. However, I also have been told by a realtor that tomorrow I will be made an offer (likely significantly closer to my $120K asking price) but will be an FHA loan. The rub is that my 90 day waiting period that I must hold title to the property does not expire until August 2nd---24 days from now and I don't know what to do. Behind curtain #1 is a 3K profit with a cash buyer scheduled to close on the 28th, or the possibility of $10-13K profit from this FHA buyer---but I run the risk that she bails, FHA doesn't appraise the house for the $118-$120K that I am asking, or she backs out.

The most important question I'm asking again is whether the FHA buyer could still get the FHA loan assuming we don't CLOSE until after the 90 day holding period, or whether it means that we cannot even begin the appraisal and docs until after the 90 days? Please advise...thanks!

The FHA guidelines say you must wait 90 days after your "Settlement", until the buyer can "execute a contract that results in FHA financing". Some people try to interpret the "execute" in an "executory fashion" (completed/closed/out), but all lenders I know interpret it just as it seems....90 days before the FHA buyer and seller can sign the contract, not 90 days before closing. The guideline is easy to find with google.

Not the answer I was hoping for, Wayne. But I appreciate it your information nonetheless. Any tips on how I can keep this buyer at bay for another 22 days? This FHA rule really sucks!

Another current link:

Seems pretty clear to me.

portal.hud.gov/hudportal/documents/huddoc?id=SFH_FHA_INFO_14-7...

The waiver applies to all sales contracts executed on or after February 1, 2010, until 11:59 PM, December 31, 2014. FHA deems a sales contract to be executed when all parties to the contract have signed the contract, and the contract is enforceable under the law of the state the property is located. Mortgages that are made on properties in which sales contracts have been executed after 11:59 PM, December 31, 2014, are not eligible for a waiver of the regulation prohibiting property flipping. FHA will not extend the waiver beyond December 31, 2014.

Section 203.37a(c) lists the sales transactions exempt from this rule. The exempt transactions include sales by HUD of real estate-owned (REO) properties under HUD's regulations in 24 CFR part 291, sales by other federal agencies of REO properties, sales of properties by nonprofit organizations that have been approved to purchase and resell HUD REO properties, sales by state- and federally-chartered financial institutions and government sponsored enterprises (GSEs), and, upon announcement by HUD through issuance of a notice, sales of properties in areas designated by the President as federal disaster areas. The regulation, including its exemptions, is still in effect.

Quick Links and Resources

 Review the Federal Register Notice (Docket No. FR-5397-N-05), "Federal Housing Administration (FHA): Temporary Waiver of FHA’s Regulation on Property Flipping; Extension of Waiver", dated November 29, 2012 at http://www.gpo.gov/fdsys/pkg/FR-2012-11-29/pdf/201...

 View the Electronic Code of Federal Regulations at http://www.ecfr.gov/cgi-bin/text-idx?rgn=div8&node...

 Contact the FHA Resource Center:

 Visit our online knowledge base to obtain answers to frequently asked questions 24/7 at www.hud.gov/answers.

Originally posted by @John Baskin :

Not the answer I was hoping for, Wayne. But I appreciate it your information nonetheless. Any tips on how I can keep this buyer at bay for another 22 days? This FHA rule really sucks!

Maybe in the listing you can add something that says offers using FHA financing will be considered starting August 1, 2015 (I think that is 22 days) ...

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