December 15, 2010

FHA 90 Day Flip Waiver has been EXTENTED through December 31, 2011

UPDATE: January 28, 2011
Nothing Like waiting until the last minute (3 days before expiration) to let the mortgage industry know that a highly effective policy will be continued. Typical ... but we'll take it. Buyers can continue to use FHA financing to purchase homes from sellers who have been on title for less than 90 days. This includes homes being flipped by private parties.

Reminder ... most lenders impose additional underwriting guidelines for flip homes so buyers need to ask their loan officer what is required before an offer is made to prevent surprises after escrow is opened.

OriginalPost: December 15, 2010

90 Day Flip Waiver set to EXPIRE January 31, 2011
FHA’s 90 Day Flip Rule waiver implemented on February 1, 2010 is set to expire January 31, 2011. The waiver was for one year and designed to help buyers using FHA financing to access a broader selection of homes for sale … and it worked. In addition to foreclosure, short sale and equity seller listings, FHA buyers were able to add to their shopping cart the growing segmented of homes sold by investors who were rehabbing and flipping.

With the expiration fast approaching and no word from FHA of an extension, lenders notified us this week they have stopped accepting new FHA loan applications involving a flipped property. At this point, my advice:

BUYERS - before you make an offer on a home, make sure your Realtor checks to see if the owner has been on title at least 90 days and preferable 180.

INVESTORS - who are flipping in less than 90 days, don’t accept offers from FHA buyers at this time.

To learn more about the 90 Day Flip Rule for VA, Conventional and FHA loans, check out these additional popular blogs:

The 90 Day Flip Rule … Some Lender Have One While Other Don’t
FHA Takes a New Position on the 90 Day Flip Rule … its OK Now!
FHA 90 Day Flipping Waiver … Tips for Buyers and Sellers

Stay tuned for the next update.