Kelly L. Zitlow

Vice President
Certified Mortgage Planning Spec.
Arizona Mortgage Specialist
Certified Mortgage Instructor
Member/AZ Mortgage Lenders Assn.

NMLS # 164330

Phone: (480) 398-4908

Mobile: (602) 561-6760

Fax: (480) 240-5324

Email

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Property Flip Waiver for FHA Loans in Arizona

We're starting off 2012 with some great news! There were 2 significant announcements FHA made at the end of 2011. First, the FHA loan limit for Maricopa County, Arizona will remain at $346,250 through 2012! We had a brief period of time last fall when we had to implement a lower FHA loan limit of $271,050 and there was no doubt we missed the flexibility of lending up to $346,250. Be sure to let your prospective Arizona buyers know the FHA loan limit will be in force throughout 2012 and that there's a strong chance the limit will decrease next year. Carpe Diem!

Second, FHA's 90 day property flipping waiver, which was set to expire December 31, 2011, has been extended through December 31, 2012 unless otherwise extended or withdrawn by FHA. All other terms of the existing waiver remain the same. It's been a while since we last reviewed the FHA loan rules on properties flipped and owned less than 90 days in Arizona. Here are a few reminders:

All transactions must be arms-length, with no identity interest between the buyer and seller or other parties participating in the sales transaction

If the sales price of the property is 20 percent or more above the seller's acquisition cost, the lender must meet 2 specific conditions:

Seller must hold title to property

Justify the increase in value by obtaining a second appraisal (the buuyer can not pay for the 2nd appraisal AND
Review the property inspection (underwriting may call for repairs from the property inspection if they pose a health and safety risk or are required to be repaired to comply with FHA Loan Guidelines)

No previous flipping activity exists for the subject Arizona property within the preceding 12 months

Property must have been marketed openly and fairly via MLS, auction, for sale by owner or developer

Change has been the norm in Arizona mortgage lending and there's no doubt we will see many more changes in the coming year. If you would like a refresher on the current lending guidelines join me when I teach Residential Financing in Today's Market ~ What you need to Know!Thursday, January 19^th. This is a 3 hour contract law CE course. Visit www.southwesternschool.com for more information on the class. I hope to see you there!

~ Kelly

Quote of the week: Write it on your heart that every day is the best day in the year. ~ Ralph Waldo Emerson