FHA “anti-flipping”regulations prohibit lenders making an FHA loan on a home that the seller has owned for less than 90 days. However,in 2010 this regulation was waived temporarily through January 31,2011 by FHA in an effort to help the housing market conditions. Subsequently,that waiver was extended through the end of 2011. Now,FHA has extended this waiver through the end of 2012.
This extension will allow buyers to use FHA-insured financing to purchase HUD-owned properties,bank-owned properties,or properties resold through private sales. The Waiver contains guidelines which must be met,including:
- All transactions must be arms-length,with no identity of interest between the buyer and seller or other parties participating in the sales transaction.
- In cases in which the sales price of the property is 20 percent or more above the seller’s acquisition cost,the Waiver will only apply if the lender meets specific conditions and documents the justification for the increase in value.
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