We weren't sure till the last minute, but the Federal Housing Administration came in with a late holiday gift for homebuyers considering the purchase of a flipped property. For the second year in a row, the Federal Housing Administration extended a temporary waiver of its "anti-flipping" rule, meaning that homebuyers (especially first-time homebuyers) who rely on FHA-insured financing will continue to be able to buy homes that have changed hands in the last 90 days without waiting for the 90-day period. The waiver is also a boon for investors seeking to rehab and flip properties, because it expands the pool of eligible borrowers
FHA continues to require that all such transactions be arms-length. In cases where the sales price of the property is 20 percent or more above the list/offer price, the waiver will apply only if the lender can justify and document the increase in value.
All of this helps FHA homebuyers as some sellers of rehabbed properties had been reluctant to enter into contracts with FHA buyers because of the cost of holding a property for 90 days, according to the Department of Housing and Urban Development.
all4now
