January 16, 2010 - A few posts ago we told you that Fannie Mae was allowing faster offers on REOs. Now the Housing and Urban Development department has changed some of the FHA rules regarding the resale of foreclosed Chicago condos and homes. This is an effort to make it easier and faster for a buyer who wants to actually live in the home to be able to purchase it from a flipper or investor.
Starting February 1, 2010 FHA will enact a one year waiver on their rule of not insuring a mortgage on a foreclosed property for 90 days after it is resold.
There are a few limitations to qualify for the waiver though. In a nutshell, the seller and buyer must not have any relationship or combined personal interest in the property.
If the resale price is 20% or more over what the first buyer paid for the foreclosed property or condo, there are more requirements that must be met.
Only forward mortgages are allowed to wave the 90 day wait period. Home Equity Conversion Mortgages are not included.
There are a few more detailed qualifications, so you’ll need to check your specific situation out to see if you qualify for an FHA mortgage.
There are also plenty of other Chicago condos that aren’t foreclosures and are FHA approved.
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