There’s a wonderful new web tool called “Down Payment Resource” that is integrated into New Hampshire’s MLS system. It helps determine if a buyer is eligible, and if a property is eligible, to use government-funded programs for down payment assistance, affordable fixed-rate mortgages, mortgage credit certificates, and rehab loans.
This tool was voted most Innovative New Techonology in 2011 by Inman News. Click on the image and it will direct you to the site.
This is great news for investors! FHA is temporarily removing the restriction for investors. FHA didn’t allow a new buyer to purchase a home that has been owned less than 3 months by the seller (typically an investor-aka flipper). The regulation was for curtailing flipping the property.
This change is a smart move for FHA/HUD because many of the homes being purchased by investors are in pretty poor condition and a typical buyer wouldn’t want to, or just couldn’t, purchase the home. This allows investors to purchase the property, do the necessary improvements, which will usually help the new buyer get a conventional loan on the property. Many, and I do mean many of these foreclosed properties don’t quality for conventional lending because they are, well, basically a mess!
Doing a quick search for “Flippers” brought up some very negative comments. They are often looked at as the bad guy, and that is just inaccurate. There is good and bad in every aspect of life, profession, business…you get the point. Flippers are ultimately just investors. Just like any other opportunity they are looking for a profit…is that bad? They are assuming the risk. A property might look like it just needs a couple cans of paint and new baths, but underneath all that could be a dragon rearing it’s ugly head. The investor will do their due-diligence, but things are often missed, and herein lies the risk.
Moving foreclosures off the market is great. In this market investors will typically price these properties low for a quicker sale and this helps your first-time home-buyer get a house that’s fixed up and a pretty good deal. Southern New Hampshire has seen it’s fair share of foreclosures, but it has not been the dominant market. Arms-length transactions have been the norm.
Trying to help those on the brink of foreclosure, many banks have joined forces to help with refinancing of at risk homeowners. Many homeowners got themselves into a pickle with those adjustable rate mortgages or ARM’s. The lending requirements are tightening to such extremes making it difficult for homeowners to escape their ARM’s. This new bit of legislature will hopefully make it easier for them to refinance into a standard mortgage.