Some more significant changes are in the works this summer concerning FHA loans.  Currently FHA allows seller’s concessions to the buyer of 6% of the selling price, but not for long.  A rule change expected this summer will allow a 3% seller’s concessions.  The logic to this change seems simple.  If the buyer is putting down the minimum down payment of 3.5% and they receive a 6% seller’s concession, the FHA is considering the buyer to be under water from the first day of ownership.  The FHA also believes the 6% incentive encourages inflated appraisals to cover the cost of the concessions.

Whatever you may think of the existing seller concession rules, the fact remains:  Concessions of 6% will be allowed until the FHA announces otherwise. Buyers and sellers who need the 6% concessions  to conclude a transaction need to know the time is ticking, thus creating a motive to purchase now especially  to a  buyer or a seller entertaining offers with  a minimum 3.5% FHA loan.

  Please give me a call at 760-831-5996 if you are contemplating using FHA for a purchase for a sale.  I know FHA.

Tags: Gary Carlson, Palm Springs Market Watch, Palm Springs Real Estate, Prudential, The Moore Carlson Group

This entry was posted on Wednesday, June 2nd, 2010 at 11:50 am and is filed under Gary's Real Estate Blog. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.