News For Investors Of Salem Oregon Real Estate
In 2003 the Federal Housing Authority, fearful that house flipping was causing skyrocketing home prices, discontinued the approval of property loans that were sold within 90 days. In 2010 that agency instituted a one-year suspension (due to expire on January 31, 2011) of that regulation. This month, however, in an effort to continue stabilizing house values and improve conditions in communities experiencing high foreclosure activity, the FHA announced an extension of the "anti-flipping" waiver through the rest of this year.
FHA Commissioner David Stevens cited the continued need for investors of Salem Oregon real estate to use FHA-insured financing to purchase HUD-owned or bank-owned properties or properties resold through private sales as the reason for the extension, thus allowing quick sales to stabilize real prices and revitalize negatively-impacted neighborhoods and communities. Stevens went on to point out that "since the waiver first went into effect in 2010, the FHA has insured more than 21,000 mortgages worth over $3.6 billion on properties resold within 90 days of acquisition." He also stated, "Because of past restrictions, FHA borrowers have often been shut out from buying affordable properties. This action enables our borrowers, especially first-time buyers, to take advantage of this opportunity and buy a home that has recently by rehabilitated. It will also help to move more foreclosed properties off the market and reduce the number of vacant homes in neighborhoods throughout the country." Stevens also acknowledged that, because of the tightened credit market, FHA-insured is often the only means of financing available to potential homebuyers.
To protect the buyer/investor of Salem Oregon real estate, the waiver includes strict conditions and guidelines to assure that predatory practices are not allowed and is limited to those sales in which the following terms are met:
All transactions must be arms-length, with no identity of interest between the buyer and seller or other parties participating in the sales transaction.
In cases in which the sales price of the property is 20 percent or more above the seller's acquisition cost, the waiver will only apply if the lender meets specific conditions.
The waiver is limited to forward mortgages, and does not apply to the Home Equity Conversion Mortgage (HECM) for purchase program.
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