We are frequently asked questions about the FHA and USDA requirements regarding the 90 days title seasoning rule. First a little background on what title seasoning is for those that do not know –
Title seasoning refers to the amount of time a homeowner has been on the deed or held ownership in a property. Title seasoning guidelines exist to limit property flipping by investors. Most mortgages today have title seasoning guidelines (generally 90 days min) to prevent real estate investors from taking advantage of homebuyers for profit.
USDA Rural Housing Loans –
USDA does not have any specific requirements regarding title seasoning. An investor can purchase a home and turn around and re sell /flip it to you the buyer within a 90 days period. However…. the lender could require that two separate appraisals be performed on the property to insure the home value is true and accurate. Again, this is all done in an effort to protect the lender and especially the home buyer interest.
FHA states there is no 90 days seasoning requirements for investor flip properties. Please click here for more information.
However, what we find is most FHA lenders will have their own rules in ADDITION to what FHA says. This is called a “lender overlays” and it’s very common among most banks and lenders.
Example – FHA states they will insure 96.5% loans with credit scores down to 580. However, it would be difficult to find any banks or mortgage lenders willing to accept them with credit score below 600 or even 620. Same thing applies to the title seasoning requirements. FHA states that this is ok, but most FHA underwriting lenders will not accept them due to the possible incurred risk.
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