Homebuyers who are trying to purchase foreclosed or rehabilitated affordable New York homes just got a hand up from the Department of Housing and Urban Development. This week HUD released a surprise announcement that they are temporarily granting a waiver to modify regulations on resale of foreclosed properties. You see most people hoping to buy properties that are bank owned after foreclosure or were bought and rehabilitated by investors have been locked out if they are using an FHA mortgage. The FHA Regulations stated that an FHA mortgage was not to be used on properties owned by the seller for less than 90 days. Because of this regulation banks and rehabbers were not likely to accept an offer from a buyer who was using FHA financing. The bank or rehabber would be required to hold the property for over 3 months and those additional months simply cost too much. The goal of the bank or rehabber is to be in and out quickly and FHA guidelines did not allow for that. This kept affordable homes out of the reach of many New York househunters.
In making this announcement HUD Secretary Donovan stated "As a result of the tightened credit market, FHA-insured mortgage financing is often the only means of financing available to potential homebuyers. FHA has an unprecedented opportunity to fulfill its mission by helping many homebuyers find affordable housing while contributing to neighborhood stabilization." You can read the full press release by clicking here.
The temporary waiver goes into effect on February 1, 2010 and remains in effect for one year. There are very strict guidelines for the waiver which must be followed. It is important to speak with a lender who offers FHA mortgages and will be able to provide you with the most current information on this and other FHA regulations and changes.
If you have been boxed out of buying an affordable New York home in the past due to the seller refusing to wait long enough to qualify for an FHA mortgage you may be in luck. Speak with your mortgage representative today to see if the waiver can help you.
If you are currently looking for an affordable home in New York State's Orange, Ulster, or Sullivan Counties give me a call, send a text, or email me today. I would love to help you negotiate the path to your new front door.
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Paddy, I read of this somewhere else and wasn't sure if it was available in New York....I'm glad to hear that it is! Hopefully this will help people looking to purchase a home before they are snatched up.
Carole as I read the waiver details it appears to be available. Buyers should check with their lender for more information. It is a great opportunity not only for buyers but for neighborhoods that have been hit hard with foreclosures and empty housing.
Paddy,
If FHA guidelines are temporarily waived for the reasons mentioned, it should would be great for your buyers. And you are right, the buyer should definintely be checking with their lenders to see if they qualify and the extent of the guidelilnes...
This information was obtained from the HUD press release which can be viewed at the link above or by clicking here. There are strict guidelines and I am sure the program will take some time to be instituted but it is available starting Feb 1 per the announcement. Thanks for the comment Lori.
You know Paddy.. all you have to do is read the Active Rain blogs and you can catch up on all the changes within our industry. One of the many things I appreciate about this forum. Thanks for sharing this, in your own words.
That is great news!
This is great news for a lot of people! I'm glad the program has been both extended AND expanded!
Paddy,
I learned about this yesterday at a sales meeting and thought it would not have that great of an impact (thinking that most rehabs could easily take 3 months to complete and then get under contract anyway). But certainly some properties could be turned around more quickly and I'm all in favor of removing unnecessary restrictions from our markets. Even if the impact is small, it should be positive. Great info and well put as usual.
-Scott
Hey Greg. It is amazing the things you learn and hear on this forum.
Thanks Don and I must say your profile pic looks so enthusiastic. I love it!
There is a lot of good news, here's hoping they get the mechanisms in place to use this temporary waiver quickly Lisa
Scott the thing that I get from it is that this can be used for foreclosures direct from bank and for flippers who often spend a month or less on rehab then try to get it sold and off their books. It is a great opportunity if it is instituted quickly and does what it says it will do.