Typically, purchasing a Federal Housing Authority (FHA) property involves a clause that prohibits the buyer to resell the property within the first 90 days of purchase. This preventative measure common among FHA insured mortgaged properties, but is sometimes included on cash contracts as well.
The FHA has waived that rule on some contracts and allowed flipping since January 2010. They hope this allowance will encourage investors to purchase and renovate blighted homes and offer turn-key home options for first time home buyers and others. Ultimately, this strategy will boost sales . Apparently, this strategy seems to be working. Since the FHA first extended the rule, it has been extended three additional times.
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