HUD Suspends 90 Day “Flipping” Requirements
Written by admin on January 16th, 2010{ 7 comments }
WOW! To many REO, Inverse Purchase, Short Sale and Wholesale investors, prayers have been answered!
Our (now) friends at the FHA have just amended the 90 day seasoning/flipping rules! The laws previously insisted you hold title to a property for ninety days before even entering into a contract if you wanted to sell to a buyer using an FHA loan.
Yeah yeah yeah, had they done this years ago, the economy may not be quite in the pooper like it is now, but nonetheless, this is big news to the creative real estate investor!
There’s certainly some “stipulations” on the process, but strangely enough, none of them seem too ridiculous… which is odd for HUD, but we’ll take it! (from the HUD website)
The waiver will take effect on February 1, 2010 and is effective for one year, unless otherwise extended or withdrawn by the FHA Commissioner. To protect FHA borrowers against predatory practices of “flipping” where properties are quickly resold at inflated prices to unsuspecting borrowers, this waiver is limited to those sales meeting the following general 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.
Click here to read the press release from the HUD website
Click here to read the waiver itself
It looks like a Gov effort to stimulate the economy has finally affected us in a positive way. Not only are new buyers getting a $8,000 tax credit to help them buy a new home, but this will open up the potential buyers pool to hundreds of thousands of buyers some of us were not able to sell to prior.
Keep in mind, this takes place February 1st… so a contract signed before that will NOT be eligible for the waiver!
Your friend and fellow investor,
Nick Cifonie
7 Responses to “HUD Suspends 90 Day “Flipping” Requirements”
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