FHA Agrees on Home Flip Waiver, Which is Great For Real Estate Investors in Chicago's Northwest Suburbs (Palatine, Schaumburg, Barrington, Long Grove, Lake Zurich, Hawthorn Woods, Mundelein, Libertyville, Wauconda, Vernon Hills, Island Lake etc.) and Entire Chicagoland Area
For the second year in a row, FHA is extending a temporary waiver of its "anti-flipping" rule.
Homebuyers relying on FHA-insured financing will continue to be able to buy homes that have changed hands in the last 90 days.
The waiver is great for investors seeking to rehab and flip properties, because it expands the pool of eligible borrowers to include those relying on FHA-backed loans.
In extending the waiver through 2012, FHA said all transactions must continue to be arms-length.
In cases in which the sales price of the property is 20 percent or more above the seller’s acquisition cost, the waiver will apply only if the lender can document the justification for the increase in value.
FHA instituted the anti-flipping rule in 2003 to protect its mutual mortgage insurance program from losses on homes that were merely flipped, rather than rehabbed.
Homes repossessed by Fannie Mae, Freddie Mac, and state- and federally chartered financial institutions were exempt from the rule.
In February 2010, the Obama administration waived the waiting period for resales -- including homes purchased and rehabbed by private investors -- in the hopes of stabilizing home prices and revitalizing communities hit by foreclosures.
It often takes less than 90 days to acquire, rehabilitate and sell properties. Some sellers of rehabbed properties had been reluctant to enter into contracts with FHA buyers because of the cost of holding a property for 90 days.
If you are an investor thinking about purchasing investment property in Chicago's Northwest Suburbs (Palatine, Schaumburg, Barrington, Long Grove, Lake Zurich, Hawthorn Woods, Mundelein, Libertyville, Wauconda, Vernon Hills, Island Lake etc.) or other areas (including downtown or western suburbs) we’ll be happy to discuss working with you.
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