As of 01FEB10 the FHA suspended the requirement that says a property has to be "seasoned" for 90 days before FHA will lend on it. For those that don't know what I mean by "seasoning" let me explain. When someone, usually an investor, buys a house and tries to sell it very quickly the property is not seasoned. FHA typically wants to see that person or corporation own that property for 90+ days. That time between the investor purchase and the sale to a new buyer is referred to as "seasoning".
This temporary relaxing of the seasoning rule is really great for those first time homebuyers and other users of the FHA loan. These are typically primary homes buyers looking to buy houses (down here in SW Florida that's Naples, Bonita Springs, Estero, Vanderbilt Beach, Marco Island, Fort Myers, Fort Myers Beach, Cape Coral, etc.) in prices below $150,000. They don't always have the big down payment required by conventional financing and are using the FHA funding the way it was meant to be used. Lots of times I see great houses, remodeled or refurbished, priced right, that my buyers can't buy because of the lack of seasoning. It's also great for the investors who are buying bulk REO packages, houses off the court yard steps, fix and flips, etc. They can now sell to these primary home buyers without waiting 90 days and incurring extra holding costs.
Problem is the government and the Federal Housing Authority says ok, go do it, but the great majority of banks say wait a minute, I don't think so. It's almost impossible for a buyer, trying to get an FHA loan, to find a bank that will give them that loan on a property that is not seasoned. Correspondent and direct lenders are emailing and calling me and some of my real estate agent friends to see if we have any leads on banks that are lending money on flips. It's a great idea, especially down here where there is a huge foreclosure, short sale, and bulk REO market. The banks just aren't letting it work. Hopefully the banks will start lending on these properties to people that need the advantages of an FHA loan. If you have any questions about the FHA suspension of seasoning, bulk REO or real estate in general in SW Florida just call me or email me. I'll be happy to talk with you about it.
