HUD announced on Friday that beginning on February 1, 2010 they are waiving the 90 day flip rule for up to one year. This is great news for many investors and homeowners allowing for FHA buyers to obtain loans on properties that have been recently purchased by investors instead of having to wait the traditional 90 days. This is HUD’s way of helping the housing market.
There are however some very specific requirements. Sellers are to hold title to the property eliminating the one day flips to FHA buyers and they are also not allowed to be related. If the sales price is 20% or more than the seller paid, the lender must document by way of a second appraisal what improvements were done to the home to support the increase If there wasn’t any work done the appraiser must provide justification for the increase in property value since being purchased by the seller The lender must also order a property inspection and provide it to the buyer who may be responsible for the cost of that inspection.
This waiver should help provide FHA buyers a greater opportunity to purchase the home of their dreams and also reduce the property inventory in the market. HUD is finally taking a positive step forward.
Attached is the link: HUD 90 DAY FLIP WAIVER REQUIREMENTS
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