FHA 90 Day Flipping Rule Waived

January 29, 2010

HUD has announced that the FHA 90 day rule on flipping will be waived for one year. HUD announced that waiving this rule would expand access to FHA mortgage insurance as well as cause quick resale of foreclosed properties across the nation. The temporary waiver of the 90-day flipping rule will begin on February 1, 2010 and will be waived for one full year until HUD extends or withdraws the waiver. This waiver should help assist in an effort to rid the Tulsa Real Estate Market of it’s Foreclosures.

Of course, with all good things they are still rules that apply. HUD has specific conditions that must be met in order for sale to occur.

These conditions are:
All transactions must be between a buyer and seller that have no identity of interest between one another or other parties involved in the sales transaction. The seller must be in possession of the title; all LLC’s, corporations, and trusts must be established in accordance with state and federal law; no flipping occurred by within the last 12 months, and the property must have been on the market openly such as through auction, MLS, or FSBO.

The waiver will not apply to the Home Equity Conversion Mortgage for purchase program but is limited to forward mortgages.

For those that are looking to use this waiver but the sales price of the property is twenty percent or greater above the sellers acquisition cost the lender has to meet specific conditions.

These conditions include repairs and rehabilitation must have occurred and be documented by a second appraisal showing an increase of twenty percent or more, if no repairs or work have been done, the appraiser must explain the increase; and an inspection of the property must be given to the buyer before the closing. The lender may charge the buyer for the cost of the inspection. The inspector does not have to be approved but of course cannot have an interest in the property and may not receive compensation except from the lender. The inspector cannot be involved with any of the repairs of the property.

With this new waiver in place, the ability to buy foreclosures should aid in riding the nation of the inventory, which may just help the housing market get back on track. To learn more or to find a home in foreclosure that you want to resell or flip, you should talk with a Tulsa Realtor.

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