Predatory Lending - Is there a loophole for flipping?
In order to sell our primary residence, we took another house on trade. We will net $80,000 on the deal which will be completed next week.
A week after we signed the contract, someone wanted to put a contract on the lower value house. The realtor checked with the state realtors board (Ohio) and was told that the contract should be negotiated with us contingent on our acquiring the property.
The family is going through FHA and has no money for closing costs, so they offered to give us $4000 more for the property than we paid for it. In turn, we will pay the closing costs which have been estimated at $4000.
Today the bank said the family will not be able to get the loan due to predatory lending laws. He said we have to own the property for 6 months before FHA would approve it.
We aren't making a penny on this deal! Just breaking even. Our money was made on the selling of our primary residence which we owned for 3 years. Does anyone who has dealt with this before have any suggestions????
We would really like to get this deal closed so we can invest in another property. Thanks
The new FHA rules stink. One of the new rules pertaining to FHA funded loans is, "A property being resold within 90 days of its acquisition is not eligible for FHA financing."
There are other types of loans besides FHA if your buyer is willing to explore them.
John