Great News For some FHA Buyers
Starting Feb. 1, HUD will eliminate the 90 day flip rule, allowing more properties to be available for FHA financing.
Some Quick bullet points:
- All transactions must be arms length with no identity of interest
between buyer and seller (see further conditions on HUD's website)
- If there was an increase in value of more than 20% (from
acquisition to flip), the following conditions must be met.
*Lender must justify the increase in value, with supporting
documentation and/or a second appraisal which verifies sufficient
renovations were done, justifying the increase in value, OR appraiser to
adequately explain the increase in value.
*Lender to order a property inspection prior to close and make it
available to borrower. (conditions apply to this one, see HUD's website
for more details)
The current exemption for foreclosing lenders or their agents being able
to sell properties in less than 90 days, still applies.
Check with your lender to see if this applies to you.