www.lasvegasmtg.com Report: FHA 90 Day Flipping Rule is set to Expire
www.lasvegasmtg.com Report: FHA 90 Day Flipping Rule is set to Expire at the end of this month. The 90 Day Flipping rule was instituted to help prevent Fraud on FHA Loans by setting certain guidelines on homes that have been purchased and renovated within the 90 day period. The FHA Waiver for the last year was in recognition this policy was actually hurting the recovery as investors who renovated the houses as well as buyers that were purchasing the renovated properties were limited on how to finance the new loan.The waiver was necessary to help investors who have been a vital part of the recovering housing market to restore neighborhoods that were vandalized or trashed. FHA instituted the following guidelines for FHA Loans purchasing a 90 Day Flipped Homes.
1. A limit on less then 20% above the previous purchase price without documentation.
2. If price is greater then 20% of the previous purchase price will need to documentation of repair and material costs.
3. Home Inspections and either a 2nd appraisal or appraisal review.
4. Some Lenders have created other overlays or do not except any properties that are 90 day flipped properties.
In the Los Angeles Times article written by Kenneth R. Harney in the Real Estate section this FHA waiver will be extended for another year. In a interview with Vickki Bott Deputy Assistant Secretary for single family FHA Housing has confirmed that the existing FHA 90 Day Flipping rule will be extended by the Agency.
This will be welcome news to investors and buyers that want a new home that has been renovated and be able to use FHA Loans with 3.5% Down to purchase these renovated homes.
If this waiver is not reinstated the only option would be the FHA 203K Streamline home loan to repair or renovate homes that are in need of repairs.