FHA Waiver For Property Flipping
By · December 6, 2012
Good News!! FHA just announced that if a buyer finds a single family property that an investor has recently purchased, and done some fixups, they are waiving the 90-day "flip" rule until December 31, 2014. Before this waiver came into place, if a buyer wanted to purchase a home using FHA financing, it could not be a "flip" house. In other words, the FHA buyer could not buy a home that had been resold within 90 days. This waiver has now been extended until December 31, 2014.
This is good news for both the investor and the FHA buyer. Many times FHA buyers are limited on the type of home they can purchase. FHA does not like their borrower to buy homes that need repair becasue the borrower is only putting down 3.5-5% down payment. So there is not much equity in the property and they don't want the new buyer to have to worry about repairing anything. However, lately, FHA has made the purchase easier and quicker, that is if sellers will accept their offer.
Some sellers are hesitant to accept FHA offers mainly because of the low down payment. If the appraisal does not match the sales price, there is no way to negotiate with the borrower due to the low down payment. However, lately, I have noticed that when an FHA offer is accepted, the process goes very smoothly and in some cases do not take any longer than a regular, larger down payment purchase. It really is a nice feeling to help someone get a home who doesn't have much money for a down payment buy they first home.
Here is the full report from FHA: