Have you heard of the FHA 90 day flipping restriction? If not, here is a quick overview…
If you are a buyer looking to buy a home with FHA mortgage financing you must buy a home from a seller who has owned that home for 90+ days or from a seller who is exempt from the rule. Here are the sellers who are exempt:
- HUD
- Government Agencies
- Qualifying Non-Profits
- Banks
- Sale as a result of inheritance
- Relocation Companies
- Fannie Mae
- Freddie Mac
- Designated Disaster Areas
The Department of Housing and Urban Development (HUD) has issued a news release indicating they will put into place a waiver to be effective February 1, 2010 removing this flipping restriction. This will be a temporary waiver good for one year. In order for the property to be eligible for this waiver the following criteria must be met:
- Arms-length transactions only – no identity of interest between the buyer and seller or other parties participating in the sales transaction
- Seller sells for 120% of the price they purchased the home at or less (some exceptions may apply)
- Standard FHA mortgages only – no Home Equity Conversion Mortgages (HECM) This waiver is scheduled to go into place Feb 1, 2010 for one year
For additional details visit the HUD site for the official Press Release.
This is great news to help sales go quicker than they have since HUD implemented the flipping restriction.
Lending A Hand
Scott Wynn
The Wynn Team
[...] on Lending a Hand on January 15, the 90 Day Flipping Waiver allows sellers who have owned the home for less than 90 days to sell to qualified FHA buyers. [...]