Extension of HUD Property Flipping Exemption

A couple of points:

The FHA is extending the availability of the temporary waiver of its regulation that prohibits the use of FHA financing to purchase single family properties that are being resold within 90 days of the previous acquisition, until December 31, 2011


To use an FHA loan on a home that is being flipped: All transactions must be an arms-length transaction. The home cannot have a pattern of previous flipping activity as evidenced by multiple title transfers within the last 12 months. The property must be marketed open and fairly. If the property is being sold for more than 20% of what the seller purchased the home then an appraisal must be done. Also an inspection must be performed.


If you have a client buying or selling a foreclosure property a knowledge of this directive will help especially if an FHA mortgage is involved.

Check with your lender to verify the current rule changes.

Overall this will give you some additional options with FHA financing.

(HUD Docket No. FR-5397-N-03)