FHA Suspends 90-day Flipping Rule potentially increasing the availability to affordable housing for Central Oregon home buyers.
What is the 90-day flipping rule?
Prior to the suspension of the FHA 90-day flipping rule, home buyers we unable to purchase homes with FHA loans 
when the seller owned the home for less than 90-days.
How does this affect me, the buyer?
The suspension of the 90-day flipping rule will hopefully increase the availability of affordable housing for buyers choosing to finance their purchase with an FHA mortgage.
As of February 1, 2010, the FHA has temporarily suspended the 90 day flipping rule for the period of one year. Buyers are now eligible to use an FHA loan to purchase a home recently “flipped”. This typically applies to homes which are “Fixer-Uppers” an investor purchased, renovated / repaired and placed back on the market. According to FHA research, in many cases it takes less than 90 days for investors to acquire, rehabilitate and resell the house. Allowing FHA buyers to purchase the home within the 90-day time frame will hopefull decrease the amount of them these homes sit vacant on the market. Not only will this be beneficial to the buyer but the community as a whole.
Contact us for more information on additional stipulations or you can view the waiver on the HUD’s website.
Folks gotta keep in mind there are some caveats to the new FHA no-flip rule change from an investors perspective, not the least of which is the "20% rule" (sales for more than a 20% gain will still be HIGHLY scrutinized). People should really read it for themselves to really understand it.
ReplyDeleteAlso, folks should realize this isn't a revision. It's a 1 year WAIVER of the 90 day no-flip rule. On Feb 2, 2011 it'll all go back to the way it was...in spite of the fact that the FHA ITSELF acknowledges the seasoning rule is a hamper to healthy community redevelopment.
I put together a concise executive summary of the FHA waiver on my blog if you're interested.
...jp moses