HUD Temporarily Waives FHA 90 Day Policy to Move Foreclosed Homes

In an attempt to move foreclosed properties more quickly, HUD has temporarily waived the 90-day ownership guideline, making these foreclosed properties available to FHA homebuyers.

RISMedia reports that:

In today’s market, FHA research finds that acquiring, rehabilitating and reselling these properties to prospective homeowners often takes less than 90 days. Prohibiting the use of FHA mortgage insurance for a subsequent resale within 90 days of acquisition adversely impacts the willingness of sellers to allow contracts from potential FHA buyers because they must consider holding costs and the risk of vandalism associated with allowing a property to sit vacant over a 90-day period of time.

This comes just before FHA’s announcement of their likely fee hike coming down the pike, helping to soften the blow of the new regulations & fees.

Buyers who have been considering foreclosed properties but could not use FHA insured financing can now, which is great news. Hopefully many of these qualifying buyers will get in to these homes with this change before the first FHA fees go up on April 5, 2010.

Towson Condominium Real Estate : New FHA Condo Guidelines Effective November 2, 2009 May Harm Towson Condo Owners

Towson Condo Owners have a new issue to grapple with.

First there was the change in the laws for condo insurance converage. Now we have the new FHA condo guidelines that may affect many people who want to buy or sell a Towson condo!

HUD announced this change in July, and the new guidelines were to take place October 1, but on September 15 they extended it per this note on their website: “This new approval process was effective for all case numbers assigned on or after October 1, 2009. However, the new effective date is for case numbers assigned on or after November 2, 2009“. This allows more time for buildings and mortgagees to be prepared for these changes. Here is the mortgagee letter from HUD, under “Notice on FHA Condomimium Processing” explaining the changes.

The biggest issue is that EVERY condo development in the United States will have to go through this process to be re-qualified to have FHA loans allowed in their building. Imagine the hold up/back up this is likely to create.

A major change in the guidelines that could ALSO create a delay is the elimination of the “Spot Loan Approval” process.  HUD states the reason for this is that “DELRAP and HRAP processes have been streamlined to allow for uncomplicated condominium project approvals eliminating the need to approve units on a “spot loan” basis.”

Unfortunately, this new process could add a decent amount of time to approving a condo project because much more paperwork has to be submitted to the bank, reviewed, and then submitted onto HUD.

Add onto that the many people wanting to take advantage of the $8,000 First Time Homebuyer Tax Credit that is set to expire at the end of November, and you have a recipe for a huge disaster looming in the near future!

SO, if you have been considering buying a condo in Towson or selling one, the time to do so is NOW. Luckily with this extension, we have a little more time to GET IT SOLD!

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