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Michael Smith, MBA, MPM's Blog

By Michael Smith, MBA, MPM | Mortgage Broker
or Lender in Roseville, CA
  • FHA Flips under 90 days & with profits greater than 100%!

    Posted Under: Home Buying in Sacramento County, Financing in Sacramento County, Foreclosure in Sacramento County  |  April 29, 2012 1:33 PM  |  761 views  |  1 comment

    Earlier this year, FHA (Federal Housing Authority) extended it's "anti-flipping" waiver through the end of of 2012.  Although this waiver applies to all FHA lenders, only a handful of lenders are actually still allowing FHA flips nationwide.  In California, my organization is one such lender who understands that flips are a great way to get inventory into an already tight real estate market. 

    Since FHA instituted the waiver in 2010, they have insured over 42,000 loans that were resold within 90 days.  This amounts to an over $7BB marketplace. 

    In order to qualify for the waiver, certain conditions must be met:

    • The transaction must be “arms length” with no other relationship between seller and buyer.
    • If the new sale price is 20% or more above the previous selling price, the lender has to document and justify the increase and meet other conditions, such as making sure the home has been inspected.

    Here are appraisal requirements for an FHA flip:

    • <90 days with profits <20% = one appraisal (21-day close)
    • <90 days with profits >20% = two appraisals (buyer can only pay for one, FYI)
      •  (35-day close)
    • >90 days with profits 20%-99.99% = one appraisal (21-day close)
    • >90 days with profits >100% = two appraisals (35-day close)

    In general, interest rates for FHA flips remain very competitive in today's low rate environment. 

    **For more information, please feel free to leave a comment, send an email or simply give me a call at 916-813-4003. 

    Equal Housing Lender.  NMLS#883642. All rates & terms subject to change without notice. 

  • HomePath Financing "....great option for many!"

    Posted Under: Home Buying in Sacramento County, Financing in Sacramento County, Foreclosure in Sacramento County  |  April 21, 2012 9:50 PM  |  431 views  |  1 comment
    I've been writing about HomePath for some time now. 

    HomePath is a Fannie Mae loan program designed for Fannie Mae REOs only!

    There is no appraisal nor mortgage insurance required. 
    For many investors, HomePath enables them to purchase homes for quick sale that are typically under priced in the market place.

    Fixed rate mortgages are available for 30 year or 15 year term. 
    When you compare HomePath vs. other loan programs with mortgage insurance there really is no comparison. 

    Friday's rate for a 10% purchase was:

    4.625% with a lender credit of (.50%)

    Fannie Mae was at 3.99% for a comparable loan however with mortgage insurance. 

    $200,000 HomePath payment = $925.45 + NO MORTGAGE INSURANCE
    $200,000 Fannie Mae payment = $858.31 + $161 mortgage insurance = $1,019.31

    In comparison, a HomePath loan will be almost $100 less than a traditional Fannie Mae loan.  Moreover, 100% of the interest on the HomePath is deductible (consult your tax attorney) whereas with a Fannie Mae with MI, the MI is not tax deductible. 

    Also of note with HomePath: if you are putting down only 3%, you can:
    *have the 3% gifted from a close friend or family member.
    *have the 3% as a secured loan from a relative, domestic partner or fiance (must have a 2% min note rate).
    *can have the 3% as a grant or secured loan from employer or public agency.

    Given the ease of the HomePath, couple with these great benefits above, although it is not the right loan for everyone, it is a "...great option for many!"

    For more information on this or any other loan program in our local universe, please feel free to email or call me at 916-813-4003. 
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