Cracking the Code: Mastering the FHA 90-Day Resale Rule

Hey there, fellow homebuyers and real estate enthusiasts! You've made it past the initial hurdles, and you're ready to take on the next challenge: understanding the FHA 90-Day Resale Rule. It might seem a bit daunting at first, but hey, we've got this! So, let's jump right in.

 

The FHA 90-Day Resale Rule: What's It All About?

The FHA 90-Day Resale Rule, affectionately known as the FHA Anti-Flipping Rule, is a critical regulation in the real estate world. It's here to make sure that homes are bought and sold fairly and transparently—especially when FHA loans are involved. But, what does it entail?

The FHA 90-Day Resale Rule: Unpacking the Essentials

Now, let's get into the nuts and bolts of this resale rule. What do you need to know?

  1. Property Value Checks: The rule ensures that the resale price of a property doesn't exceed 120% of what the seller originally paid. This guards against artificially inflated property values.

  2. Documenting Improvements: If the resale price is 20% or more above the seller's acquisition cost, be ready to provide documented evidence of renovations or improvements that justify the increase.

  3. Waivers: There are exceptions to the 90-day rule. For instance, if the seller acquired the property through inheritance or foreclosure, they may be exempted from this rule.

Navigating the FHA 90-Day Resale Rule

So, how do you navigate this rule without breaking a sweat?

  1. Talk to Your Lender: Early discussions with your lender are essential. They can help you determine if an FHA loan is the right choice for your situation.

  2. Lean on a Realtor: A seasoned real estate agent can guide you to properties that meet the FHA 90-day rule criteria, making your life much easier.

  3. Expect Delays: If you stumble upon a property that doesn't adhere to the 90-day rule, be prepared for potential delays. Explore alternative financing options or look for properties that do comply.

In Conclusion

The FHA 90-Day Resale Closing Rule is like a referee in the game of real estate, ensuring a fair and equitable match for all parties involved. While it may introduce some complexities and potential delays, it's ultimately there to safeguard your interests.

With a trusted lender by your side and the knowledge you've gained here, you can navigate this rule successfully and make your homeownership dreams come true using an FHA loan. Here's to the exciting journey ahead!

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