1) What’s an FHA buyer?
To be an FHA (Federal Housing Administration) buyer, you would have the ability to put down a significantly lower amount (typically 3-3.5% as opposed to the conventional 20%) in order to purchase a home. Additionally, FHA loans use more flexible credit scoring so it’s easier to get a loan if your FICOs aren’t as perfect as you may like. It’s a great option for many people who want to own a home, but don’t have 20% or more liquid cash or optimal credit scores.
2) Is the loan process different when getting an FHA loan?
Not too much. It still goes through a loan officer who handles FHA loans. There are a few more quidelines that have to be met by the FHA during approval and escrow, but they aren’t dauntin. If you’re interested, it’s definitely worth checking into and we have a gal who can help.
2) Why wouldn’t I be able to buy a newly flipped home as an FHA buyer?
For years the federal government prohibited the use of Federal Housing Administration mortgage financing by buyers purchasing homes from sellers who had owned the property for less than 90 days. The idea was to prevent speculators from defrauding the government through quick flips of houses — often involving straw buyers and corrupt appraisers — at wildly inflated prices.
Today, investors are a big part of who is going to help us quickly move crappy or outdated inventory that was in foreclosure. They buy it, spruce it up or add on to it and then get it out to the consumer as soon as they possibly can. Thankfully, the government has recognized this fact and extended the rule for an additional year.
So if you’re looking for a move-in ready home, these flips are often the way to get them!