California Real Estate Sales

Changes to FHA financing

90 day Flip Rule will no longer apply to FHA Financing. Previously, if an investor purchased the house, and then renovated it and put it back on the market (i.e. “flipped” it), he would not be able to accept an offer from an FHA buyer until the “flip” was over 90 days old. Well, this has been changed. The investment seller doesn’t have to wait to offer their “flips” to FHA Buyers.

Mortgage Insurance Premium will be increased from 1.75 to 2.25% Now your FHA loan will cost more, but you still have the option of paying this fee at the close of escrow or financing the fee into you loan.
All loans have Mortgage Insurance fees, but the way that FHA set up the loan with such low down payments, they didn’t have enough to cover the MIP. So they made the provision in the FHA Rules that the one-time premium fee would be charged and the buyer had the option of paying it upfront or financing it into the loan. Our preferred lenders can give you the whole story.

Seller Allowed Credit for closing costs will be reduce from 6% to a maximum of only 3%. This is really a good thing. The more you ask a seller to contribute back to your closing costs, the weaker your offer is in competition with other offers that don’t ask for seller credit.

No More Spot Approvals on Condo Complexes that don’t have FHA approval. It’s not just the buyer that needs approval on FHA, but if you are purchasing a condo, the entire condo complex needs to have FHA approval for safety and proper maintenance and management. We were able to apply for a “spot approval” on just 1 condo in the complex. Well, it’s now required that the entire complex has approval, which can take 90+ days to complete the application. Some lenders have systems and people in place that can shave considerable time off this application process.