fha flipping

FHA flipping policy

In an effort to stimulate repairs and sales in neighborhoods hard hit by the mortgage crisis and recession, the FHA waived its standard prohibition against financing short-term house flips. Before the policy change, if you were an investor or property rehab specialist, you had to own a house for at least 90 days before reselling — flipping it — to a new buyer at a higher price using FHA financing. Under the waiver of the rule, you could buy a house, fix it up and resell it as quickly as possible to a buyer using an FHA mortgage — provided that you followed guidelines designed to protect consumers from being ripped off with hyper-inflated prices and shoddy construction.

FHA Flipping

FHA flipping policy

In an effort to stimulate repairs and sales in neighborhoods hard hit by the mortgage crisis and recession, the FHA waived its standard prohibition against financing short-term house flips. Before the policy change, if you were an investor or property rehab specialist, you had to own a house for at least 90 days before reselling — flipping it — to a new buyer at a higher price using FHA financing. Under the waiver of the rule, you could buy a house, fix it up and resell it as quickly as possible to a buyer using an FHA mortgage — provided that you followed guidelines designed to protect consumers from being ripped off with hyper-inflated prices and shoddy construction.

fha flipping

FHA flipping policy

In an effort to stimulate repairs and sales in neighborhoods hard hit by the mortgage crisis and recession, the FHA waived its standard prohibition against financing short-term house flips. Before the policy change, if you were an investor or property rehab specialist, you had to own a house for at least 90 days before reselling — flipping it — to a new buyer at a higher price using FHA financing. Under the waiver of the rule, you could buy a house, fix it up and resell it as quickly as possible to a buyer using an FHA mortgage — provided that you followed guidelines designed to protect consumers from being ripped off with hyper-inflated prices and shoddy construction.

Fear of Deflation

The US stock market tumbled, long term bond yields (US Treasuries) dropped to levels not seen since 2013 – causing mortgage rates to go downward.

What is causing the turmoil?  What are the implications?

A big immediate concern is both Europe and Asia – where the economies seem to be stammering. Italy and France both released budgets that do not address spending cuts nor income tax increases – believing they need to stimulate their economies in contrast to what northern European countries in the Euro.  Those countries believe in a more conservative approach, cutting spending and forcing reforms to fix their economies long term.

Meanwhile, oil prices continue to drop and ebola has spread to the US while the there seems to be no real coalition in the Middle East where wars rages onward.

As stocks go down, oil prices decrease, bond yields drop – a new fear has emerged according to experts.  It’s deflation.

But, not all is doom and gloom.  Dropping oil prices mean lower fuel costs for consumers in the US, which in large part is driven by the increased production of oil and gas in the United States.  Additionally, drops in bond yields bring forth lower long term interest rates.  Those individuals who missed out on re-financing their mortgages in prior year may want to think about it again – saving money on large debts can be significant.