90-day resales receive extension through 2012!
Good news again for investors as the FHA (Federal Housing Administration) has extended the waiver for the 'anti-flipping' rule for another year. This means that buyers will be able to continue to purchase homes that have changed hands within the last 90 days.
This is really good news for investors since the FHA loan is popular with first time home buyers, and investors who rehab and flip properties will continue their appeal with buyers who don't have large cash reserves.
The anti-flipping rule was put into place in 2003 to protect the FHA from losses due to investors purchasing homes without doing any rehab work, and flipping the properties.
According to Inman News, "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, the Department of Housing and Urban Development," commented at the time. "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", HUD said.
FHA has said "In extending the waiver through 2011, it insured 21,000 90-day property flip loans worth more than $3.6 billion in 2010 that would otherwise not have qualified for financing."