FHA Flip Waiver to the 90-Day Restriction Has Been Extended
The Federal Housing Administration
(FHA) recently announced that it is extending the availability of the
temporary flip waiver that previously prohibited FHA financing for properties
being resold within 90 days of previous acquisition. The flip waiver has been
extended to December 31, 2014.
The waiver is applicable to all
single-family properties being resold within the 90-day period after
prior acquisition, and is not limited to foreclosed properties.
The waiver is subject to certain
conditions, and mortgages must meet the following requirements to be
eligible for the waiver:
- All transactions must be arms-length, with no identity
of interest between the buyer and the seller or any other parties
participating in the sales transaction.
- The seller must hold recorded title to the property.
- There's no pattern of previous flipping activity as
evidenced by multiple title transfers within a 12-month time frame (this
is not limited to just resales).
- The property was marketed openly and fairly, such as
MLS, auction or FSBO.
Additional restrictions apply if
the sale price of the property is 20% or more above the seller's acquisition
cost. Under these conditions, the waiver will apply only if the lender meets
the following requirements:
- Prospect requires a second appraisal (not charged to
the borrower).
- An FHA appraiser must perform an appraisal in
compliance with all FHA requirements.
- The second appraisal must justify the value increase
above the first appraisal to be eligible for the waiver.
- A property inspection must be ordered and paid for by
the buyer. Any health and safety issues discovered during the inspection
must be satisfied and re-inspected by the home inspector after resolution.
If you would like to know more
about the FHA flip waiver to the 90-day restriction and how these changes might
benefit your clients, please contact me today.
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