cooldcre: FHA Flips OK Through End 2012

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FHA Flips OK Through End 2012

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Acting FHA Commissioner Carol Galante has announced another extension of the FHA temporary anti-flip waiver.

FHA regulations prohibit insuring a mortgage on a home owned by the seller for less than 90 days (except under specific circumstances), but the rule is (again) waived through December 31, 2012, unless otherwise extended or withdrawn by FHA.

The regulation was waived in 2010 through Jan. 31, 2011, then extended again through the end of 2011.

The December 2011 extension will allow buyers to continue to utilize FHA-insured financing for HUD-owned and REO properties, in addition to resale properties. Experts say this allows homes to resell more quickly and helps to stabilize real estate prices and revitalize neighborhoods and communities.

The extension is effective through Dec. 31, unless extended or withdrawn by the FHA. All other terms of the existing Waiver remain the same. The Waiver includes safeguards to prevent predatory property flipping (reselling properties immediately after purchase at inflated prices). Sales must meet the following criteria:

  1.  All transactions must be arms-length, with no identity of interest between the buyer and seller or other parties participating in the sales transaction.

 2.  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.

 3.  The Waiver is limited to forward mortgages, and does not apply to the Home Equity Conversion Mortgage (HECM) for purchase program.

 

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Comment balloon 4 commentsThe Isaacs Team llc • December 27 2011 07:29PM

Comments

That is good news, hopefully that continues to improve the market.

Posted by James Lyon, 916-521-1214 (LyonSF) over 6 years ago

I have mixed emotions about it all. On the one hand it does increase sales and stabilize prices to a degree. On the other hand, it seems tantamount to the past practices that got us all into trouble to begin with. I just hope it is the right thing to be doing...only time will tell...Wayne

Posted by Wayne Goss, THE MYSTERY MAN (Keller Williams) over 6 years ago

This is good news for a change, the simpler and easier they keep it the better for all of us

Posted by Joan Congilose, Marlboro, Manalapan, Freehold NJ Homes (Century 21 Action Plus Realty ) over 6 years ago

As long as flippers don't start to control the marketplace again I think its a good thing. Wish I could say the same for the increased G fees that are being levied to pay for the payroll tax holiday.

Thanks for your comments, James, Wayne and Joan!

Posted by The Isaacs Team llc, BUY SMART. SELL SMART. HIRE SMART AGENTS. (Slate Properties 1121 5th St NW DC 20001) over 6 years ago

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