I just had an experience that you want to avoid on your next deal. I have what you will call a perfect buyer; good income, cash in the bank, and almost perfect fico score and very responsible client. You will think that any lender will fund this loan.

We made an offer on a property that the seller purchases from a trustee sale 2 months earlier and remodeled it. The loan was decline because the owner did have the property for 90 days or more and it was a 5% down conventional loan. The excuse on the down payment was mortgage insurance companies will not insure conventional loan less that 10% down regardless of the other factors.

However, I am glad to say that the loan was later underwritten by another lender with my client increasing her down to 10% with an appraisal field review. I do understand all the caution but do the lenders have to throw baby with the bath water? Responsible buyers are been denied because of the over caution by lenders. What happened to case by case and other factors?

Through this transaction I learned flip properties must be held by the investor for 90 days from date of purchase before selling it. FHA is the best financing for any buyer with low down payment.