July 3, 2013
A reader asks, “Hello, can you help us with a couple of questions please. What does the FHA consider as a “Flip-it” property? How many days does this involve from an original sale of a property?”
“Flipping” is defined by the FHA as the sale of a home purchased with an FHA loan within 90 days of the original sale.
Under normal circumstances the FHA has anti-flipping rules in place that forbid this practice with homes purchased with an FHA-insured mortgage. But the FHA issued a waiver to these rules back in January 2010. It has since been extended more than once and the current waiver of FHA anti-flipping rules doesn’t expire until 2014.
According to a November 2012 edition of The Federal Register, “FHA is extending the availability of the temporary waiver of its regulation that prohibits the use of FHA financing to purchase single family properties that are being resold within 90 days of the previous acquisition, until December 31, 2014.”
Additionally, “Through the regulatory waiver, FHA encourages investors that specialize in acquiring and renovating properties to renovate foreclosed and abandoned homes, with the objective of increasing the availability of affordable homes for first-time and other purchasers, helping to stabilize real estate prices as well as neighborhoods and communities where foreclosure activity has been high.”
Who does this waiver affect? What kinds of properties can be purchased and flipped with an FHA loan under the waiver program? “The waiver is applicable to all single family properties being resold within the 90- day period after prior acquisition, and is not limited to foreclosed properties. Additionally, the waiver is subject to certain conditions, and mortgages must meet these conditions to be eligible for the waiver.”
The Federal Register points out that the anti-flipping waiver does NOT apply to homes with HECM loans. For more information on the FHA’s anti-flipping waiver, contact the FHA directly by calling 1-800 CALL FHA.
Do you have questions about FHA home loans? Ask us in the comments section.
Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for www.valoans.com for (8) years and is currently the Associate Editor for FHANewsblog.com.
Browse by Date: