As a reminder, 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 initial Flip Waiver took effect on February 1, 2010. The expiration date of the initial Flip Waiver was set as 12 months from its start date. That originally had the waiver set to expire on January 31, 2011. Prior to the expiration, HUD issued an extension through December 31, 2011, then subsequent one through December 31, 2012.
A 3rd extension of the rule in 2012 taking the effective date through December 31, 2014, unless otherwise extended or withdrawn by FHA.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 continued good news for investors purchasing properties to then re-sale them soon afterwards.