FHA Flipping Rules for NC

Use A NC FHA Loan To Buy A Foreclosed Home

NC Foreclosures as of April 2013Have you been looking for a Bank Owned or FHA Foreclosed home in North Carolina?  Did you know you can use a North Carolina FHA Loan to do that!  You must have noticed a growing trend in the massive amounts of foreclosures that are on the market  – in North Carolina more are coming on the market everyday…Lots of people are trying to buy a foreclosed home, but they are running into problems re-selling them because of the FHA Flipping Rules.

However, the trend is reversing here as the market improves. Many North Carolina First Time Home Buyers are looking at Foreclosures as the best deal to purchase!

Realtytrac.com reports that 1 out of every 362 homes in North Carolina is in foreclosure.  For home buyers this sounds like it would be a perfect opportunity to pick up a foreclosure property for cheap.

Right?

NC First Time Home Buyers looking at getting an North Carolina FHA Loan have hit with the ole FHA Flipping rules.  The FHA Flipping rule prevented home buyers from obtaining FHA Loan Financing if the person SELLING the property did not own it for more than 90 days.

Why Is This Important

Most Foreclosure Homes in North Carolina happen to fall into the price range of the NC FHA home buyer.  Many of these foreclosures are purchased by investors who make some improvements and repairs so that the house can be brought to market and sold in a good habitable condition AND the seller can make a decent profit.

Here are the income and sales limits for FHA in Various NC Cities:

Asheville and Buncombe County NC FHA Limits

Wilmington NC and New Hanover County FHA Loan Limits

Greenville NC and Pitt County FHA Loan Limits

Chapel Hill and Carrboro / Orange County NC FHA Loan Limits

Wake Forest NC FHA Loan Limits

Garner NC and Fuquay Varina FHA Loan Limits

Greensboro NC and Guilford County FHA Loan Limits

Charlotte and Monroe NC FHA Loan Limits

Pinehurst NC FHA Loan Limits

Raleigh, Cary Apex, NC FHA Loan Limits

Imagine for a moment that you have found a home you love, priced well below market value and it had previously been through a foreclosure.  You put an offer in and it is accepted.  Feeling all excited you gather your financial information, review your credit and get everything together that you need in order to apply for the FHA Loan.

You bring your Application Packet to your Loan Originator who reviews it and seems really happy because it has been a very long time since he has seen a borrower put that much effort into putting together a perfect loan application.  Given your credit score and your income, getting the North Carolina FHA Loan is a sure thing; right?

Should be… but once the Loan Processor receives the copy of the Chain of Title she sees that the seller has only owned the property 27 days.

Your loan officer calls and explains that FHA Loans are not allowed on homes that the seller has not owned for more than 90 days; AS OF THE DATE OF THE CONTRACT!

Imagine how draining that feels…

But Wait; FHA Does Something Right

FHA has waived the Anti-Flipping rule as of March 1st, 2010.  They have done this to…

“help facilitate the return of repaired and habitable properties on the market in a timely fashion”.

There are some things to keep in mind regarding the waiver of the FHA Anti-Flipping rule:

  • It must be an arms length transaction
  • If the sales price is more than 20% higher than what the seller paid for it, the repairs made by the seller will need to be documented and justified

So don’t hold back, go ahead and apply for that North Carolina FHA Loan now and Let’s Go Shopping!

Call Steve and Eleanor Thorne at 919 649 5058 for an North Carolina FHA Loan and get pre-qualified today.  We know the FHA Rules, and we’ll be glad to help you qualify for the NC First Time Home Buyer Program too!

I try and answer all questions :)