Friday, March 26, 2010
Property Flipping
Most investors are now requiring a Property Flipping Waiver to be signed at closing. Most allow the seller to own less than 90 days as long as the current sales price is greater than or equal to a 20% increase over the seller's acquisition cost.
W2 Transcripts
Just an FYI, many underwriters have started conditioning for W-2 transcripts just like if you were self employed and full returns are needed. This can impact closing time frames.
FHA Up Front MIP Fee Increases
UFMIP goes to 2.25% on case numbers ordered on or after April 5, 2010.
Notice of Funding - USDA Loans
Program funding for the Single Family Housing Guaranteed Loan Program will likely be exhausted by the end of April, 2010.
Once funding is exhausted, the Agency will not issue Conditional Commitments "subject to receipt of appropriated funds." This is because it is not certain when additional funding will be available.
Limited funding may become available for disaster areas declared in 2008, or in disaster areas declared for Hurricanes Katrina and Rita. Limited funding may also become available as prior Agency commitments are de-obligated, however, such funding will be very limited.
We apologize for any inconvenience this may cause you. Should you have any questions, you may contact the Single Family Housing Guaranteed Loan Division at (202)720-1452.
___________________________________________________________________
After having spoken with our investors Rural Housing Division, I wanted to provide a little more information and also specifically discuss the impact of this problem as it relates to new construction. Most of you who have been exposed to this loan product are probably used to these periodic announcements about program funding being exhausted. Generally speaking, in the past, we have been able to continue selling these loans even after funding was exhausted because they knew that additional funding had been approved and knew when it would be available. The situation this time is different because additional funding has not been approved and they do not know when it will be. While they do expect additional funding to eventually be approved, the timing is uncertain, so we cannot continue to sell the loans once funding runs out. Funds for the program are expected to last through the end of April or possibly early May.
IMPORTANT:
The critical element to ensuring that your loans have program funding is the USDA Conditional Commitment. When you obtain the conditional commitment from USDA, you effectively reserve the program funds for the related loan. If the program funds are exhausted prior to the time you obtain the conditional commitment for your loan, the transaction will not be able to proceed until such time as additional funding may be approved. As such, the best way we can manage this problem is to make sure to get the conditional commitment from USDA as soon as possible. Effective immediately, all USDA loans must be conditioned that approval is contingent upon our ability to obtain the USDA conditional commitment. It is imperative you are made aware that if program funding is exhausted prior to our receipt of the USDA conditional commitment, the related loans will not be closed or funded until such time as additional funding for the program is approved by Congress.
With respect to new construction, common practice seems to be to wait until completion of the home before submitting to USDA for the conditional commitment. However, USDA will issue the conditional commitment based upon an appraisal that is subject to completion per plans and specs, so it is imperative that your new construction loans obtain the conditional commitment before funding is exhausted.
Once funding is exhausted, the Agency will not issue Conditional Commitments "subject to receipt of appropriated funds." This is because it is not certain when additional funding will be available.
Limited funding may become available for disaster areas declared in 2008, or in disaster areas declared for Hurricanes Katrina and Rita. Limited funding may also become available as prior Agency commitments are de-obligated, however, such funding will be very limited.
We apologize for any inconvenience this may cause you. Should you have any questions, you may contact the Single Family Housing Guaranteed Loan Division at (202)720-1452.
___________________________________________________________________
After having spoken with our investors Rural Housing Division, I wanted to provide a little more information and also specifically discuss the impact of this problem as it relates to new construction. Most of you who have been exposed to this loan product are probably used to these periodic announcements about program funding being exhausted. Generally speaking, in the past, we have been able to continue selling these loans even after funding was exhausted because they knew that additional funding had been approved and knew when it would be available. The situation this time is different because additional funding has not been approved and they do not know when it will be. While they do expect additional funding to eventually be approved, the timing is uncertain, so we cannot continue to sell the loans once funding runs out. Funds for the program are expected to last through the end of April or possibly early May.
IMPORTANT:
The critical element to ensuring that your loans have program funding is the USDA Conditional Commitment. When you obtain the conditional commitment from USDA, you effectively reserve the program funds for the related loan. If the program funds are exhausted prior to the time you obtain the conditional commitment for your loan, the transaction will not be able to proceed until such time as additional funding may be approved. As such, the best way we can manage this problem is to make sure to get the conditional commitment from USDA as soon as possible. Effective immediately, all USDA loans must be conditioned that approval is contingent upon our ability to obtain the USDA conditional commitment. It is imperative you are made aware that if program funding is exhausted prior to our receipt of the USDA conditional commitment, the related loans will not be closed or funded until such time as additional funding for the program is approved by Congress.
With respect to new construction, common practice seems to be to wait until completion of the home before submitting to USDA for the conditional commitment. However, USDA will issue the conditional commitment based upon an appraisal that is subject to completion per plans and specs, so it is imperative that your new construction loans obtain the conditional commitment before funding is exhausted.
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