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Showing posts from January 18, 2010

FHA "no-flip" Rule to be Suspended for 1 Year

A significant change in FHA lending guidelines is likely to spur quicker rehabilitation and absorption of foreclosure properties back into the real estate markets. On Friday, the Department of Housing and Urban Development announced that it is suspending the "90-day no flip" rule for one year, beginning on February 1, 2010.

Simply put, FHA policy denies mortgage loan guaranties to buyers if the seller had owned the property for less than 90 days. Buyers and Sellers that were agreed on sale terms were being forced to sit on the sidelines and wait until the Seller's title was properly "seasoned." This loan regulation tripped up several would-be buyers and sellers that I worked with last year. No doubt many other buyers and sellers hit the same road block.

"Flipping" is the practice of selling a property quickly after acquiring it. The idea of course is to buy low and sell high. The idea here is to enable entrepreneur/rehabbers to purchase bank-owned or d…