Maryland Home Mortgage Loans: Effective February 1, 2010, HUD will no longer require a Seller to hold a property for a minimum of 90 days before re-selling using FHA financing.

Previously, this anti-flip rule was put in place to help stabilize large swings in property values.  Investors were buying homes for cash, doing minimal repairs and re-selling for huge profits.  HUD feels they can help fuel the economic recovery by not restricting the re-sale of fixer-uppers or financially distressed type properties.

HUD will however require the Seller to document the costs of improvements and reserves the right to require a 2nd appraisal.  This is important because prior to this waiver, many of the bargain homes were only available to purchasers who had the financial resources to pay cash or purchase using Conventional financing (minimum 10% down).  As a result of the HUD waiver, buyers with a minimal downpayment (3.5%) can now compete using FHA financing with deep-pocket investors for the best bargain properties available.

In an attempt to gain an even greater competitive edge Buyers are seeking out a full Desktop Underwriter's review (automated approval) and subsequently strike out the financing contingency in the Purchase Offer.  No financing contingency contingency can equate to a 1% - 2% reduction in the sales price over a competing offer that is contingent on financing.

Seller's worst fear?  Contract voided due to a last minute financing glitch.  Too risky to give up the financing contingency? If you have an DU or LP automated approval, you've got your loan.

For more information on how we can help you with your home mortgage, please visit our website at Maryland Home Mortgage Loans