The Department of Housing & Urban Development (HUD) announced Friday January 28th it will extend the suspension of their rule that prevents FHA from insuring a home loan that is being used to purchase a home owned less than 90 days by the seller. The extension is good until January 1, 2012. This rule was originally put in place to prevent investors or ‘flippers’ from using straw (fake) buyers and crooked appraisers to defraud the government.
The waiver has been extended to December 31, 2011. FHA Commissioner David Stevens said, “Today I can report that this policy change has been effective. Since the original waiver went into effect on last February, FHA has insured more than 21,000 mortgages worth over $3.6 billion on properties resold within 90 days of acquisition.”
—— BREAKING NEWS —– 12/23/2011 — HUD just announced the 90 day flip waiver has been extended through 2012. Read details (click that link) about why this is a BIG HAIRY DEAL and see if guidelines have changed.
This will benefit the local Inland Empire housing market where investors are buying up bank owned homes, doing some renovation, and then re-selling them to real home buyers who are using FHA financing. With 65% of home buyers using FHA loans in the Inland Empire, this will continue to encourage investors to purchase, renovate, and re-sell these homes, get them in better condition, and make them eligible for traditional FHA financing.
Prior to this 90 day waiver, investors had to wait until the 91st day before they could accept an offer from a buyer using FHA financing. This 90 day anti-flip extension will keep the turn times quick and get more properties into the market’s inventory.
It’s important to know that not all lenders offer FHA ‘flip’ financing and even fewer are experienced at originating these types of loans.
If you would like to inquire about purchasing a newly renovated home that is being flipped with an FHA loan, email me brad(at)homeloanartist(dot)com or call direct (951) 215-6119.
Qualify for Special FHA ‘Flip’ Financing