HUD’S 90-DAY FLIPPING RULE WAIVER
Effective with purchase contracts accepted by all parties signed and dated on or after February 1, 2010. This waiver will be effective for one year, unless otherwise extended or withdrawn. Please note: due to investor requirements, the requirements for the waiver may change.
In an effort to stabilize home values and improve conditions in communities where foreclosure activity is high, HUD has announced a temporary policy that will expand access to FHA mortgage insurance and allow for the quick resale of foreclosed properties.
The policy change will permit buyers to us FHA-insured financing to purchase HUD owned properties, bank-owned properties, or properties resold through private sales.
To protect FHA borrowers against predatory practices of "flipping" where properties are quickly resold at inflated prices to unsuspecting borrowers, this waiver is limited to those property sales meeting the following criteria:
1. All transactions must be arm-length, with no identity of interest between the buyer and seller or other parties participating in the sales transaction.
2. In cases in which the sales prices of the property is 20 percent or more above the seller’s acquisition cost, the waiver will only apply if the lender meets specific conditions.
3. The waiver is limited to forward mortgages, and does not apply to the Home Equity Conversion Mortgage (HECM) for mortgage purchase.
Specific conditions to other details of this new temporary policy are in the text of the waiver available on HUD’s website at: http://www.hud.gov/offices/hsg/sfh/waivpropflip2010.pdf
If you have any questions, please feel free to contact either me at any of the telephone numbers below.
Kim Duclos
Coldwell Banker Wardley
(888) 949-2890
(702) 521-3939
