FHA Extends Anti-Flipping Waver
Originally Posted on Feb 4, 2011 - FHA/HUD will allow buyers using FHA financing to purchase a home that has been quickly renovated for sale. The extension on the waiver is until December 2011!
For those that are familiar, FHA had previously placed a restriction on buyers purchasing homes using FHA financing from buying homes that had been purchased for a lower price, renovated, and then quickly sold for a profit. In most cases, a house that needs even significant repairs can be renovated in about 30-45 days, but couldn't be purchased by a buyer utilizing FHA financing until recently, when FHA temporarily permitted this practice once again! The reason is that the anti-flipping rule is a hurdle for any investors looking to renovate smaller homes and sell them. With the majority of the homes being sold under $200,000 being bought by buyers utilizing FHA financing, an investor would have to pay additional lender fees, and lose potential buyers that cannot wait the full 90 days plus closing time to get a home!
There are still some requirements that need to be met though. For instance, if the purchase price for the FHA borrower is significantly higher than the purchase price for the investor, 2 appraisals will need to be done, and FHA doesn't allow the second appraisal to be paid for by the buyer! This is a seller's expense!
Click here to read the Anti-Flipping waiver press release on HUDs website.
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