The Federal Housing Administration recently extended the program that allows investors to obtain an FHA mortgage to rehabilitate certain types of properties. Let’s provide some additional details.
On December 28th FHA extended the temporary waiver of its regulation that prohibits using FHA financing to purchase and rehabilitate single family properties. This waiver normally applied to investors only that resell a property within 90 days. The new expiration date is December 31, 2012.
Most investors could not get a mortgage eligible for FHA insurance if the contract of sale for the purchase of the property was within 90 days of the prior acquisition. Not every investor or property type falls under the guidelines. It is best to check with FHA or a lender for factual information about a specific property and set of circumstances.
The main purpose of this policy extension had two goals. The first encourages investors that specialize in acquiring and renovating foreclosed and abandoned houses to act. The government wants to increase the availability of affordable “move-in ready” homes for first time purchasers or other buyers with limited financial resources. Another program goal is to assist the recovery of high-foreclosure neighborhoods and communities.
The waiver applies to all single family properties resold within the 90-day period after prior acquisition. The waiver is not limited to foreclosed properties either. However the waiver does have certain conditions. The waiver does not apply to mortgages insured under HUD’s Home Equity Conversion Mortgage (HECM) Program.
Your lender can provide additional details on the mortgage process. Your REALTOR® has a list of available properties in this area.
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Andy Kalinowski is a REALTOR® with CENTURY 21 Doris Hardy and Associates, LLC in Columbus, Mississippi. Contact him by cell (or text) phone – 662.549.3421 or by e-mail – andyk@dorishardy.com. He is also available for web video chat.
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