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FHA MI – Does Little Good to Put More Down; FLIPs OK

Today one of our clients made an offer on a FLIP property (bought less than 90 days ago) and the seller was refusing ALL FHA offers until July 1st. BUT, FHA allows for FLIPs now. Fortunately, the seller called me after getting our very strong and emphatic “Pre-approval letter”, and it looks like our offer will be accepted.

Point #1: FHA allows for FLIPs.

Point #2: Have sellers call us so we can tout the strength of your buyers, and/or set sellers straight.

Our FHA Buyers often want to put more down to avoid MI. BUT, with 30 Fixed Rate Loans, MI is required no matter what. There is always a 1% Up Front MI fee, irrespective of the loan-to-value. And, there is monthly MI no matter what, for 5 years. The monthly MI is 0.90% of the loan amount if the LTV is over 95%, and it is 0.85% if the LTV is under 95%.

Point #3: With rates this low, always put the minimum down for FHA (3.5%).

Call Jay Voorhees at (925) 855-4491

Real Estate Broker, CA Bureau of Real Estate, BRE# 01524255, NMLS# 335646