The mills and factories who employed these masses quickly became aware that there simply was no housing available for these migrant workers who had come from small towns and villages to find better paid work.
The problem was that the extra wages were soon eaten up by high housing costs caused by a chronic housing shortage. After a while many of these people began to drift away from these “high paying” jobs back towards the homes that they possibly already owned or rented cheaply out in the country.
The mill owners quickly realized if they wanted to keep hold of their labour force they would have to build houses that they could afford to live in, which is exactly what they did, resulting in miles upon miles of terraced houses that once dominated our cities.
In the twenty first century, the mill owners have gone and so has most of the affordable terrace housing. Some modern companies, most notably banks offer their employees very cheap mortgages or additional payments towards ever increasing rents. They do this for the same reasons the mill owners did, there staff cannot afford to live where they work.
For those that work for such institutions they have no worries about putting a roof over their heads, but for many, the disproportionate cost of property especially in city’s or other desirable areas is making it impossible for many to find a decent place to live.
The huge increases in the value of even lower end homes has knocked large numbers of people out of the housing market altogether. Those wishing to rent because they cannot afford the large deposit down payments are no better off. As the value of property and the cost of mortgages has meant that landlords must now charge higher rents. Which many tenants simply cannot afford, even if they make a reasonable income.
This has been a vicious circle especially over the last four or five years, the cost of housing has simply escaped most people’s incomes. Even reasonably well paid jobs may not be enough to cover basic housing costs in very many areas of the UK.
This is where the concept of affordable housing comes in to help people to find a decent place to live at a price that is within their financial reach. Wirral homes have not escaped the high housing costs of the nearby big cities and some organisations have sprung up to help those in housing need, including Wirral Partnership Housing, who are trying to help redress the balance of over-priced local property in the area.
The number of house flipping shows we see on cable tv today really points to the popularity of real estate flipping. House flipping can be the perfect way to grow one’s investment and even earn a living. However, there are some recent changes in FHA house flipping laws which can effect how you do business.
These new laws have been created because there are also a lot of scammers out there trying to con anyone investing in flips. There are an incredible number of people out there losing their homes these days. So much so that there are now some FHA rules in effect to protect the market.
The new FHA House Flipping Laws are pretty involved reading but here’s the basic points:
Property sold within 90 days purchase won’t be able to get financing with FHA mortgages using HUD insurance.
Those selling a property within 91 and 180 days of purchase must record the resale value if it’s selling for more than the last purchase price.
If the property is selling within 91 days and 12 months of purchase, HUD may require additional documentation of the home’s market value.
With these new rules from the FHA you’ll have some trouble getting buyers for your house flip. It basically means that you’ll need to find buyers for your house flips that aren’t using FHA backed loans. These rules are also commonly referred to as ‘seasoning issues’. You’d have to hold the property for at least three months, or let it season before you could sell it to a buyer with financing of this type.
There are only three exceptions to these rules. They are:
1. Selling corporate housing purchased during the relocation of an employee
2. Selling HUD owned real estate property
3. Selling a newly build house
These exceptions don’t typically apply to real estate house flipping, except maybe the HUD owned property. However, there are lots of other buyers using more conventional loans to purchase property.
Why Create these Rules?
In the past few years, The US Department of Housing and Urban Development (HUD) noticed that there were quite a few homes going into foreclosure. Most of these foreclosure homes were owned by first time low income homeowners who had government backed loans from the FHA, VA or Fannie Mae. These are all loans protected by Principal Mortgage Insurance (PMI) which is provided by HUD.
When homeowners lost their homes to foreclosure, HUD ended up covering the remainder of the mortgages through their government backed insurance programs. HUD has passed these FHA house flipping rules to protect these homeowners and themselves from losing money. You can see the rule in a document called, ‘Prohibition of Property Flipping in HUD’s Single Family Mortgage Insurance Programs; Final Rule; 24 CFR Part 203, Doc. No. FR-4615-F-02.’ You can usually get them from the government’s Federal Register Site.
Advice for dealing with Seasoning:
Sell to Buyers Non-Conforming Loans. There are still a lot of other mortgages out there that don’t require or use PMI. These are conventional loans made to buyers who can make large down payments and are more likely to purchase a very nice remodeled house anyway.
Document all costs and profits. Keep all of your receipts and creating a personal record of whom you paid for what and the improvements made to each property. บริษัทรับสร้างบ้าน
Lease-to-own your house flips. The FHA house flipping rules only apply to recently purchased homes. Let the buyer lease-to-own the property and you’ll avoid seasoning issues entirely. Since, the homeowner won’t be applying for a mortgage to pay off the property; you don’t have to worry about them being denied because the property was recently purchased.
There are still plenty of ways to flip a house even with these new house flipping rules. These rules help wholesaling investors and HUD by helping buyers keep their homes when they get mortgages