FHA 90 Day Flip Rule is Waived Until December 31, 2011
The Dept. of Housing and Urban Development (HUD) announced it is instituting a one-year moratorium on the Federal Housing Administration (FHA) 90-day anti-flipping rule.
With certain exceptions, such as HUD-owned and bank-owned properties, FHA rules currently prohibit insuring a mortgage on a home owned by the seller for less than 90 days. However, for 2011, buyers may use FHA-insured financing to purchase properties resold through private developers and investors, providing access to a broader array of recently foreclosed properties.
Under the temporary waiver, all transactions must be arm's-length, and most properties will require additional documentation of improvements and justification of the price increase. Additional documentation may include a second appraisal and a property inspection ordered by the lender.