| FHA Waives 90-Day Flipping Rule |
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On Friday, January 15, 2010 the Federal Housing Administration (FHA) waived the 90-day Flip Rule for one year, effective February 1.
A press release issued by the U.S. Department of Housing and Urban Development (HUD) stated that "FHA research finds that acquiring, rehabilitating and the reselling these properties to prospective homeowners often takes less than 90 days. Prohibiting the use of FHA mortgage insurance for a subsequent resale within 90 days of acquisition adversely impacts the willingness of sellers to allow contracts from potential FHA buyers because they must consider holding costs and the risk of vandalism associated with allowing a property to sit vacant over a 90-day period of time."
The waiver is limited to sales meeting specific conditions:
- All transactions must be arms-length, with no identity of interest between the buyer and seller or other parties participating in the sales transaction.
- In cases in which the sales price of the property is 20 percent or more above the seller's acquisition cost, the waiver will only apply if the lender meets specific conditions.
- The waiver is limited to forward mortgages, and does not apply to the Home Equity Conversion Mortgage (HECM) for purchase program.
The waiver can be read in its entirety as a PDF from the HUD Web site.
Posted on January 18, 2010 12:30:33 by  IPTV.Boyz
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