Guest Blogger - Lena Reid, BB&T Bank AVP, Mortgage Loan Officer
FHA Property Flipping Rules -(Temporary Policy Change)
HUD is taking action to expedite the sales of foreclosed properties to new homebuyers.
FHA currently prohibits insuring a mortgage on a home owned by the seller for less than 90 days. Effective with Purchase Contracts dated on and after February 1, 2010, the 90 day Property Flipping Rule will not apply.
This policy is temporary ONLY and has very strict conditions (SEE BELOW) to assure against predatory practices. (Change is effective for a 1 year period unless otherwise extended or withdrawn by the FHA Commissioner.)
This policy change will permit homebuyers to use FHA-insured financing to:
• Purchase HUD-Owned Properties
• Bank Owned Properties
• Properties Resold through Private Sales
Must meet the following conditions:
• All transactions must be arms-length, with NO identity of interest between the buyer and seller or other parties participating in the sales transaction.
• In cases in which the sales price 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.
Specific Conditions are:
a) Must justify increase in value by supporting documentation and/or a second appraisal which verifies that the seller has completed sufficient legitimate renovations, repair or rehabilitation work on subject property to substantiate the increase in value. In Cases where no work performed, Appraiser to provide explanation of increase since prior title transfer.
AND
b) A satisfactory property inspection prepared by a qualified inspector and provided to purchaser prior to closing. The borrower or seller can be charged a reasonable and customary
inspection fee for this service. Inspections can be done by FHA approved inspector, a licensed
home inspector or registered engineer. The inspector may have no interest in the property or relationship to the seller.
Lena Reid | BB&T Bank AVP, Mortgage Loan Officer | Office: 941- 492-2623 | Toll-free: 888-493-0300 | 1580 Jacaranda Blvd, Venice, FL 34293 | LReid@BBandT.com Contact Kari A. Battaglia, PA GRI SRES® , licensed REALTOR® in Venice Florida at 941-270-1851 to list your home, answer general questions or to help you search for homes for sale in Venice Florida. I currently serve customers in Venice Florida, Englewood Florida, Nokomis Florida, South Venice, Laurel, Osprey and Casey Key and Manasota Key communities. As a private landowner, I also have Tennessee properties available in the Chattanooga area. Call or email me to receive a list of Tennessee properties available for sale. Contact me by email at Kari@DiscoverVeniceRealEstate.com. Need information fast, call me direct at 941-270-1851. Copyright©2009. By Kari A. Battaglia PA. All Rights Reserved. DiscoverVeniceRealEstate.com - FREE MLS Search, Buyers guide, Sellers guide, Community Info/Links
Serving customers in Venice Florida, South Venice, Osprey, Nokomis Florida, Casey Key, Manasota Key, Englewood Florida, Rotonda West and North Port communities. Call me to list your home for sale, answer questions regarding steps you can take to AVOID FORECLOSURE or answer any general questions you may have about real estate.
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Kari; Thank you so much for the information above. This is very useful. Always good to keep up with the laws and regualations.