FHA Extends 90-Day Anti-Flip Waiver

The anti-flip waiver extension is good news for the housing market. This ruling is especially favorable for investors, who buy foreclosed or distressed properties the ability to buy, fix and resell without a waiting period.

The previous ruling required investors to own properties for more than 90 days so as to prevent flipping simultaneously from one buyer to another. This manner of flipping in some situations  caused unsuspecting buyers to pay more than the properties were actually worth.

The Federal Housing Administration (FHA) will suspend it’s anti-flipping rule for another year in hopes of getting foreclosed homes to market faster and sold just as fast.  This is good for sellers as they will attract more buyers, help reduce some of the carrying costs and lessen the time a home may sit vacant.

Because FHA loans require a low down payment, this is very attractive for buyers who may not have a lot of cash to buy a house. Buyers will be able to use FHA financing for the purchase of bank owned properties, HUD properties and any other type of sale within the loan limit for their area.

In order to qualify the transaction must be arms length – meaning there is no relationship between the buyer and seller and the property can not have been involved in any previous flipping. The waiver only applies to new loans.

About Linda Urbick Linda

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Filed under: Short Sales & Foreclosures

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