Posts Tagged ‘homebuyers’

The Federal Housing Administration has long banned FHA borrowers from buying homes previously owned for less than 90 days. To potential homebuyers, that may not have seemed like much of problem. After all, there are plenty of homes available in the MLS.But to the investors who buy distressed properties and fix them for a quick sale, the restriction has been a big roadblock. Now the blockage has been lifted.

The FHA just announced the waiver of 24 CFR 203.37a(b)(2). The temporary halt will take effect on February 1, 2010, and will be effective for one year unless otherwise extended or withdrawn by the FHA Commissioner.Investors are elated, but homebuyers should be happy too.

A new supply of cheaply bought, well repaired homes will come on the market. Many such bargains wouldn’t happen without removal of the 90-day capital-carrying burden imposed by the FHA.Homebuyers should seek out bargains rather than let Realtors restrict the “inventory” to listed homes. Search for terms like “wholesale homes” in your area. Many such properties are unlisted—in effect For Sale By Owner. If a broker won’t approach FSBO sellers, search for “real estate lawyers” to make such purchases possible.

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