So back in January 2010 we reported (and rejoiced) that the FHA had decided to suspend the 90-day anti-flipping rule for 1 year.
The now-infamous rule was originally intended to prevent shady speculators from defrauding the government, but it also stifled the purchase and renovation of foreclosed homes by legitimate investors like you and me. Yep, dumber than a bag of hammers.
But the 90 day flip rule waiver in January 2010 effectively enabled qualified buyers to once again get FHA mortgages on properties that were acquired by rehabbers less than 90 days before. Great for them, great for us, great for the economy – thanks for the bone FHA.
And now, in an effort to keep up the momentum gained by the housing market, they’ve just decided to extend “anti-flipping rules” suspension for at least another year to increase FHA lending.
Yay for Sound Logic and Good Reason!
Yep, this is (again) great news for investors trying to flip properties to FHA Buyers. But (again) keep in mind the same caveats and important nuances apply…and you really need to be aware of them if you aren’t already…
- The seller must hold title (no back-to-back, same day closings)
- You still need short-term funding
- The 20% Rule still applies
- The property still can’t demonstrate a “Flipping Pattern”
If you want to read the original waiver from HUD, here it is. Or for a rather exceptional executive summary of these must-knows, you can read this FHA property flipping waiver post I put together with the first waiver.
So 2 Questions…
It’s nice to finally have something nice to say again about the FHA, isnt’ it?
My question to you is…
- How much or how little effect do you think this will have on the real estate market and/or economy?
- Also, how will/won’t this decision effect you personally?
Please post your comments below…