At least they don’t do so in any way which stands much chance of meaningful success in the the real world. Here is the direct quote from HUD Secretary Sean Donovan’s May 29, 2009 press release: “Home buyers using FHA-approved lenders can apply the tax credit to their down payment in excess of 3.5 percent of appraised value or their closing costs, which can help achieve a lower interest rate.” (emphasis added)
FHA released a notice the other day extending the property flipping waiver, but I didn’t relay the information since I saw there was an obvious mistake in the notice. Please note that this still does not mean that investors can buy properties and resell them with FHA financing prior to the expiration of the 90 day period. This rule is designed to adapt the rule to the fact that lenders often hire other firms or subsidiaries to handle foreclosure sales.
Sorry to be a little late with this update, but I’ve been trying for several days to figure out the real scoop on exactly what happened. For the first time that I can ever remember, FHA actually published a mortgagee letter on their website and then just removed it.
Usually the process of revoking a Mortgagee Letter would involve issuing another Mortgagee Letter with updated rules. Looks like someone at HUD may have gotten ahead of themselves!
Here are the full details on how the monetization of the $8000 first time homebuyer tax credit will work for FHA loans. You can obtain the full HUD Mortgagee Letter 2009-15 here.
I have been receiving emails and even phone calls asking for the location of the HUD Mortgagee Letter about this all morning so I thought I needed to go ahead and post the details that I have. [Details are now available here]
HUD’s Fiscal Year 2010 budget press release. Pretty much complete bureaucratic gobbledygook.
HUD FY2010 BUDGET SHIFTS FOCUS TO RESPONSIBILITY, EFFECTIVENESS, AND TRANSPARENCY
WASHINGTON, DC – U.S. Housing and Urban Development Secretary Shaun Donovan today unveiled the Department’s fiscal year 2010 budget, which focuses on responsibility, effectiveness and transparency. The proposed 2010 budget exercises strong fiscal discipline, consolidating or eliminating 27 programs and activities, and investing in initiatives to increase transparency and accountability.
I have always respected the Wall Street Journal as a source of information. Yet all too often I find that when a subject I actually know something about is discussed, the information is off the mark! On May 4, 2009, there was an opinion piece on the online Wall Street Journal Opinion Journal entitled “The Next Housing Bust“. The opinion given in this piece may possibly have the right conclusion for all the wrong reasons.
On January 19, Scott Syphax of the Nehemiah Foundation announced that Congressman Al Green has introduced HR 600, a bill to restore seller assisted down payment programs to the FHA loan universe. Here is a link to the press release. I haven’t seen the final bill. It seems to be a “lite” version of H.R .6694 introduced in the last Congress. It reintroduces tiered mortgage insurance premiums, often referred to as ‘risk based mortgage insurance premiums” although this bill does not seem to refer to them that way.
