Saturday, July 14, 2012

FHA Idaho Still Backing for the Average Joe

By Josie Lynn

The number of house flipping shows we see on cable tv today really points to the popularity of real estate flipping. House flipping can be the perfect way to grow one's investment and even earn a living. However, there are some recent changes in FHA Idaho house flipping laws which can affect how you do business. These new laws have been created because there are also a lot of scammers out there trying to con anyone investing in flips. There are an incredible number of people out there losing their homes these days. So much so that there are now some FHA rules in effect to protect the market.

The new FHA House Flipping Laws are pretty involved reading but here are the basic points. Property sold within 90 days purchase won't be able to get financing with FHA mortgages using HUD insurance. Those selling a property within 91 and 180 days of purchase must record the resale value if it's selling for more than the last purchase price.

Next, the Manufactured homes and FHA Insured Loans is classified and taxed as real estate. A long term lease may also be acceptable in certain instances. The manufactured home must have a floor area of not less than 400 square feet. The finished grade elevation beneath the manufactured home shall be at or above the 100 year return frequency flood elevation. The home must sit on a permanent foundation and all foundation systems, new and existing, must meet the guidelines published in the HUD Permanent Foundations Guide for Manufactured Housing, (HUD-7584), dated September 1996. A certification attesting to compliance with this handbook must be obtained from a licensed professional engineer and included in the insuring file.

This last requirement can throw the loan processor into a quandary if they have never expedited a manufactured home transaction previously because this request will often show up at the 11th hour of loan closing. Nine times out of ten the appraisal report will show that the home is on a foundation system so the processor or loan officer won't have alarm bells off of worry going off when they receive this condition. Unfortunately, the appraiser often simply determines "permanence" strictly on the basis that the tires and axles have been removed or some other vague set of standards, not on the basis of the foundation attachment.

When homeowners lost their homes to foreclosure, HUD ended up covering the remainder of the mortgages through their government backed insurance programs. HUD has passed these FHA house flipping rules to protect these homeowners and themselves from losing money. The FHA Idaho house flipping rules only apply to recently purchased homes. Let the buyer lease-to-own the property and you'll avoid seasoning issues entirely. Since, the homeowner won't be applying for a mortgage to pay off the property; you don't have to worry about them being denied because the property was recently purchased. There are still plenty of ways to flip a house even with these new house flipping rules. These rules help wholesaling investors and HUD by helping buyers keep their homes when they get mortgages.

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