More and more these days in the Prince William County Virginia area, many homes that are truly gorgeous and renovated are not available to the first time buyer who is preapproved for an FHA Loan.
Everyday, I work with buyers who call all excited when they see a home in their price range that is perfect for them based on the photo's that they are seeing.
Then I have to drop the bombshell when they ask."Peggy, What Does NO FHA LOANS due to FHA Seasoning Mean In The Comments?"
Well, that seller cannot accept an FHA Loan. The only way you can buy that home would be to use Conventional Financing. That means you would need an additional one and half percent down payment to equal the minimum five percent down payment rule on Conventional Loans.
So let's say it was a $225,000 house x Five percent down payment= $11,250.
However FHA only requires a three and half percent down payment which = $7850.
That means you the buyer would need an additional $3400. to go to settlement.
The next question is always. Why?
Simply put. FHA has extended a ruling that allows investors who buy a foreclosed home to be able to FLIP them after the home has seasoned 90 days. This ruling is in effect until May 2010. So what that means is a person can buy a FORECLOSED HOME only, and renovate it and flip it at a higher cost. This program is in place to help revitalize neighborhoods across America and it's working. Most of these flips are stunning as seen in some of the photo's above. Now is it fair than an investor can buy a foreclosed home for cheap and fix it up and make tens of thousands of dollars in a few months? Yes...because they take the risk and they have the ability to qualify and have the vision needed to transform ugly homes into showplaces!
The good news is the these homes are MOVE-IN Ready and will require almost nothing except paint and your personal touch to make them home.
So what do you do as a Buyer to insure you can buy one of these homes:
- Make sure your Buyers Agent know the rules and checks out everything about this home so you do not get caught up in a contract where you cannot perform.
- Talk with your Loan Officer to see if you can qualify for a Conventional Home Loan
- In today's market the more flexible a buyer you are, the more opportunities you will have.
- Do you need help finding a home?
- Find out now what kind of home loan you qualify for GET STARTED HERE
Contact Peggy James or Erick Blackwelder of Erick and Company of Exit 1st Choice Realty, Woodbridge VA. Realtors®, call 703-851-3085 (Peggy) or 703-590-2252 (Office) to list your property for sale or to purchase a property in Lake Ridge, Westridge, Old Bridge Estates, River Falls, Middle County, Manassas, Montclair, Dumfries, Occoquan, Dale City, Gainesville area's
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Contact Peggy James or Erick Blackwelder of Erick and Company of Exit Choice Realty, Woodbridge VA. Realtors®, call 703-851-3085(Peggy) 703-590-2252 (Office).Give us a call and we can "GET YOUR HOME SOLD FAST"to list your property for sale we service Woodbridge, Lake Ridge, Westridge, Old Bridge Estates, River Falls, Middle County, Manassas,Gainesville, Garrisonville and Triangle area's.Basically all of Prince William County Virginia. Manassas Park, Haymarket,Montclair, Dumfries, Quantico, Fort Belvior, Occoquan, Dale City.
This is good information Peggy and is something to prepare clients for. With investors moving back into the market, this is probably going to continue to come up.
Hi Brian, I agree.
There is one bright side to this situation. VA Buyers not have a shot at wininng the bids on these homes! Any Militray Veteran who is preapproved and ready to buy in Prince William County VA has some great opportunities awaiting them!