FHA “Flipping”

If you’ve ever flipped a home, or thought of flipping a home, you’ll want to constantly stay informed.  The real estate industry is constantly changing.  We just got the news that FHA (Federal Housing Authority) extended the “flipping” waiver through 2014!   FHA  has a rule that forbids “flipping” – executing a new sales contract for a home with an FHA-insured mortgage in 90 days or less.

house flipping property guidingHowever, FHA has waived that rule and allowed flipping since January 2010 as a way to boost sales during the housing slowdown. Since that time, the rule has been extended three times, including the most recent announcement this week.

By waiving the flipping rule, FHA hopes to encourage investors that specialize in acquiring and renovating properties. If investors upgrade the housing stock, FHA says, it will make more livable homes available for first-time buyers and others.

The waiver applies to all single-family properties being resold within the 90-day period after prior acquisition – it’s not limited to foreclosed properties. However, the waiver is subject to certain conditions, and mortgages must meet these conditions to be eligible for the waiver. The waiver isn’t applicable to mortgages insured under HUD’s Home Equity Conversion Mortgage (HECM) Program.

It’s important to understand that not all foreclosures are created equal!  Some foreclosed properties, specifically Fannie Mae owned, have what’s called a “First Look Period”.  Typically, this last for 14 days once the property has hit the market. During this time period, ONLY owner-occupant home buyers can place offers.  Once the 14 days have expired, investors can place offers at that time.  If investors are getting an FHA loan and want to flip the home after the 90-day period, they can only do so after they’ve waited to place the offer after the First Look Period.  This encourages first-time home buyers to have the first opportunity to place an offer.

The Department of Housing and Urban Development announced the extension in the Federal Register, which is posted online.  If you have any questions, don’t hesitate to contact me.

Excerpts taking from: © 2012 Florida Realtors®

Contact me for more info:
239.292.9404 (c) | kristen@kristenpell.com | www.kristenpell.com
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Posted on December 6, 2012, in Real Estate and tagged , , , , , , , , , , , , , , , , , , , , , , , . Bookmark the permalink. Leave a comment.

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