Purchase A Recent Property Flip With A Florida Home Loan

Fort Lauderdale Mortgage Broker Offers Florida Home Loan For Recent Property Flip

Are you an Agent or Buyer that have been faced with the challenge of trying to purchase a recently “flipped” property? One of the most perplexing problems for real estate investors that are buying and selling properties has been bank restrictions on these transactions that involve a Florida home loan. Industry guidelines have required a 90 day waiting period before a buyer can enter into a contract to purchase and be eligible for a Florida home loan.

Real estate investors want to buy and sell as quickly as possible.  Most times they are purchasing a property for cash or with private funds, do a quick rehab and already have a buyer lined up to purchase.  The 90 day wait period to even enter into a contract, has precluded many buyers needing a Florida home loan. The result has been many cash buyers getting a great deal, while those needing a Florida home loan have missed these opportunities.

Earlier this year, FHA passed a temporary waiver of its 90 day “flip rule” and said buyers would be eligible for FHA Mortgage Insurance on transactions without the wait period providing it met certain criteria.  The waiver allowed the investor to resell the property with up to a 20% profit (based on acquisition cost plus documented improvements) with one appraisal  and if over 20% required a second appraisal.  The ultimate decision is up to the underwriter and lender making the Florida home loan.

This announcement was enthusiastically received by Real Estate Agents, Property Flippers and Buyers.  However, like most other lending guidelines today, banks take FHA, or Fannie Mae rules and impose their own overlays on top of them to mitigate their own risk in the transaction.  This has resulted in many lenders being fearful of originating a Florida home loan that is over the 20% profit threshold, even with a second appraisal.  Banks are extremely risk adverse these days and very few have any appetite to potentially buy back a loan.  Unfortunately, lenders are all staying on the safe side of risk and most are still unwilling to allow a transaction that is selling for more than a 20% profit to close without waiting 90 days.

This certainly wasn’t the intent of the waiver period, but it is the reality.  The waiver was created to help the housing market absorb the glut of distressed housing and stabilize sooner.  Most people don’t realize that HUD doesn’t actually provide the Florida home loan, it only provides the lender or bank originating the loan the FHA mortgage insurance protection.  Otherwise, banks wouldn’t make a loan with less than 20% down.

Fort Lauderdale mortgage broker, Harvey Collier, now offers a Florida home loan to purchase a “Flip Home” without a waiting period.  As long as the property value is supported by 2 independent appraisals, the lender has no profit restriction on the transaction.  If you are a buyer or Agent looking to take advantage of a great deal on a recently flipped property, or an investor looking to do a quick flip, First Trust Mortgage has a Florida home loan for you.