FHA Waives 90 Day No Flip Rule for 1 Year

As almost everybody has been saying all along … short sale and REO flipping are becoming more and more accepted by the government and major lending institutions. This is evidenced, among other things, by Freddie Mac’s recent bulletins, updated credit policies by Wells Fargo to allow for C buyer financing, and revised title bulletins stating that the C purchase price does not need to be revealed to the A lender as long as certain disclosures are made.

Today, the FHA has rescinded its 90 anti-flipping rule and will, for a period of 1 year, allow FHA buyers to obtain loans on properties that have been recently purchased by investors.

There are a few details that you need to understand (e.g. if the resale is 20% higher than the investor’s purchase certain safeguards must be met.)

If you enjoy reading legalese, the waiver of 24 CFR 203.37a(b)(2) may be found here:

http://www.hud.gov/offices/hsg/sfh/waivpropflip2010.pdf