Does anyone know where to find state statutes on how long we must hold onto a property before being able to sell it? I live in Illinois and the Realtors that I have talked to are telling me I cannot close on the sale of one of my flips until 90 days after buying property. Is this uniform for every state, or just mine?
I have heard of things like this but I thought they are more lender restrictions. Banks will not fund a loan on sale of a property or refinance unless the property has been owned for so long. I have not heard of a state law, but I have not invested in Illinois. Did you check with the agent that mentioned this? I would ask some experienced investors, mortgage brokers, agents and real estate attorneys in Illinois.
it’s called “title seasoning” - and it’s usually when FHA is involved - so if your buyer is purchasing fha - the deal can’t go through until title is seasoned (meaning it’s title transfer is more than 90 days old).
as for conventional 20% down - it shouldn’t matter.
Thank you for the info. I wasnt sure if it had to do with the seasoning period for FHA or some sort of law. What percentage of the loans out there are FHA as opposed to conventional?
In todays market I imagine most new loans where the purchase price is within the FHA loan limits are going to be FHA.
Here is a link to a data search for FHA limits https://entp.hud.gov/idapp/html/hicostlook.cfm
And here is a link to the complete list http://www.michaelquarles.com/fha_limits.pdf
Conventional loan seasoning (non-FHA) is going to be dependent upon the lender, so I would call around and ask some local lenders what time period they are requiring. As for the agent that you asked originally, as my father in law says: “Even stupid people need jobs.”
Didn’t the FHA do away with seasoning requirements? I’m pretty sure that right now there are no seasoning requirements for your end buyer if they are buying FHA. Of course the lender may still have an opinion about that.
Stjepan- I would check your facts, because as far as I know, FHA still has a 90 day seasoning requirement. Maybe Christopher W can confirm this?
You can sell a house immediately after buying it. There’s no law about this.
The FHA, and other lenders, have a policy that requires you as the seller to have owned the house for more than 90 or 180 days or whatever.
So you can either rent the house for that long and then sell it, or find a way to sell it to someone who does not have to have one of those loans, like a cash buyer (some do exist), or seller finance it, or someone who is getting a loan through someone that doesn’t have seasoning requirements, which is harder than it used to be.