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12/10/2014

No More Flip this House with FHA


I'm taking a hatchet to the flippers.
Those guys with the television shows,
the books on how to get rich flipping
the house of the foreclosed borrower,
the guy with the thousand dollar seminar.

Mine government says no more.
FHA loans will not be allowing the
90 day flip rule anymore.

First time home buyers, FHA buyers
who have little money for down payment or
repairs have been the most likely to buy a
flipped home.

I've heard many a sad story from buyers
of flipped houses.
The house was a meth lab before the flip.
Everything leaks,
nothing is guaranteed
and the new buyer is
stuck not with a pretty
home, but the money pit...







Federal Housing Administration’s Property Flipping Waiver ENDS
Federal Housing Administration’s (FHA) Office of Single Family Housing announced that the temporary waiver of FHA’s regulation that prohibits the use of FHA financing to purchase single family properties that are being resold within 90 days of the previous acquisition, expires on December 31, 2014.  Very little notice, so if you have a house under contract that is a flip you will not be able to close a FHA loan after 1/1/2015 if the contract is dated in 2015.
The waiver applies to all sales contracts executed on or after February 1, 2010, until 11:59 PM, December 31, 2014. FHA deems a sales contract to be executed when all parties to the contract have signed the contract, and the contract is enforceable under the law of the state the property is located. Mortgages that are made on properties in which sales contracts have been executed after 11:59 PM, December 31, 2014, are not eligible for a waiver of the regulation prohibiting property flipping. FHA will not extend the waiver beyond December 31, 2014, no more flip this house 
Section 203.37a(c) lists the sales transactions exempt from this rule. The exempt transactions include sales by HUD of real estate owned (REO) properties under HUD’s regulations in 24 CFR part 291, sales by other federal agencies of REO properties, sales of properties by nonprofit organizations that have been approved to purchase and resell HUD REO properties, sales by state- and federally-chartered financial institutions and government sponsored enterprises (GSEs), and, upon announcement by HUD through issuance of a notice, sales of properties in areas designated by the President as federal disaster areas. The regulation, including its exemptions, is still in effect.
Quick Links and Resources
· Review the Federal Register Notice (Docket No. FR-5397-N-05), “Federal Housing FHA Government loans”, news November 29, 2012 at http://www.gpo.gov/fdsys/pkg/FR-2012-11-29/pdf/2012-28918.pdf

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