No, You CAN’T Buy That House!

Sacramento, CA

If you are a Sacramento home buyer you may have been told by your Sacramento Realtor that you can’t buy that house.

There is a very good reason…it’s called the 90 Day Rule.

Now, you ask, what is the 90 Day Rule.  Good question.  When a house has been purchased by an investor,  fixed and or remodeled and FLIPPED, in other words a property that has transferred Title in the last 90 or even 180 days.

Bet you thought I was going to write about pancakes…well, I’ll leave it up to your imagination why I put a picture of pancakes here.

FHA will NOT loan money on one of these flipped homes for sale.  Mortgage Insurance companies will no longer insure flipped property.   It is very important that your Realtor know if a home or condo has been flipped before ever showing you the property.

If you want to buy a flipped property as an FHA buyer, you cannot write the contract until the 91st day.  Click if you would like to read the ruling from HUD about Property Flipping

I am told that the only way to finance a flipped house or flipped condo is with 80% financing meaning the buyer puts a down payment of 20% and even then there are a lot of hoops to jump through.

Fannie Mae and Freddie Mac with a conventional loan do have the same rule about not loaning for flips but there are obstacles to overcome during the appraisal process when buying a flipped home for sale.  You may find yourself paying for a second appraisal and a rigorous scrutiny of the appraisal.

Just remember, if you are getting an FHA loan you cannot buy one of this flipped homes for sale under any circumstances.

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If you have a real estate question that you would like an answer to by Gena Riede, Sacramento Realtor ® specializing in helping home buyers and home sellers be sure to check out and read what other home buyers and home sellers have asked and feel free to ask your Real Estate question by email.   Perhaps, your question will be part of the next article featured on Sacramento REAL Estate Voice