On January 15, 2010, HUD announced a temporary waiver of the prohibition of property flipping if the seller owned the home less than 90 days with strict conditions to ensure against predatory practices.
Effective immediately, my company, W.J. Bradley will be unable to entertain banked transactions utilizing the 90-day waiver if the sales price is greater than or equal to a 20% increase over the seller's acquisition cost. The 90 days is calculated from the seller's acquisition date to the purchase contract date of the new transaction. The 20% is calculated from the seller's acquisition cost (sales price) to the sales price of the new transaction.
Please note that transactions that involve foreclosure sales from the foreclosing lender to our borrower are not affected by this requirement as they were always an exempt transaction to the initial property flipping directive imposed by FHA in 2003.
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