As anticipated, HUD has announced that the 90 Day Flip Waiver for FHA mortgages has been extended once again. On January 15, 2009, HUD announced a waiver to its restriction of a borrower being able to obtain FHA financing on a property that had been acquired by the seller in the 90 days preceding the sales contract date.
The inital waiver took effect on February 1, 2010. The expiration date of the waiver was set as 12 months from its starting date. That originally had waiver set to expire on January 31, 2011. HUD issued an extension through December 31, 2011.
The 2nd extension is now effective through December 31, 2012, unless otherwise extended or withdrawn by FHA. All other terms of the existing Flip Waiver will remain the same. The Waiver continues to be limited to sales meeting the following conditions:
- All transactions must be arms-length, with no identity of interest between the buyer and seller or other parties participating in the sales transaction
- In cases in which the sales price of the property is 20 percent or more above the seller's acquisition cost, the Waiver will only apply if the lender meets specific conditions and documents the justification for the increase in value
This is good news for investors purchasing properties to then re-sale them soon afterwards.