Arizona mortgage requirements on Flix and Flip home sales
Arizona mortgage requirements on Fix and Flip home sales
The majority of home-buyers out there in the Greater Phoenix area have been looking at Short Sales and Bank Owned homes that are on the market because that is what the majority of the home inventory is. Many buyers are beginning to writer offers on homes that are ‘Traditional Sales’, as we call them. At least that is what it looks like at first glance. Traditional real estate sellers are people who have owned and typically lived in the home for a couple years or so. A buyer comes along and wants to buy their house and they strike a deal.
Traditional sales can easily be confused with ‘Fix and Flip’ sales. Fix and Flips are currently in full swing in Arizona Real Estate. What are Fix and Flippers? They are real estate investors who purchase a home typically at a foreclosure auction under value, make improvements to the home, and then sell as soon as possible for a profit. Fix and Flip sellers want to own the home for the least amount of time as possible. They want to turn over their profit fast. It makes sense, but Arizona buyers and Realtors need to beware of lending guideline requirements. That’s right, borrower who want to buy a Fix and Flip house that is owned by the seller less than 90 days will require additional financing pieces.
FHA requirements on Flips
- 2 appraisals will be necessary on all FHA loans for flipped properties
- The underwriter will require a home inspection to be done and they will require that all structural, health, and safety issue be repaired.
Conventional requirements on Flips
- 2 appraisals may be necessary. It will depend on the lender who is underwriting the loan. Underwriters are being very careful to document any appreciation or rise in sales price from the seller’s acquisition price.
October 20, 2011 by Eddie Knoell · Leave a Comment
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