OfflineThere is an anti flipping law FR6415 regulating flipping of HUD homes. FR-4615 also defined how soon after a house is flipped it would be eligible to be bought with a FHA-insured loan. Before the anti-flipping rule, you could buy a house at $100,000 dollars and re-sell it within hours or days to most buyers at $150,000 dollars as long as inspections and appraisals supported this re-sale value.
(By the way, this is still the case for non-conforming loans – loans that are not insured by HUD or restricted by HUD guidelines)
With the advent of the anti-flipping rule, re-sales occurring within 90 days or less after acquisition would not be eligible for FHA-insured mortgages, re-sales are eligible with an additional appraisal from an independent appraiser (buyer-appointed, most likely).
Additionally, FR-4615 requires the buyer’s lender to obtain additional documentation (i.e. repair documentation) to support the value for re-sales occurring between 90 days and 1 year in locations or circumstances where HUD considers flipping to be a problem.
Has anyone had issues flipping a Home with a buyer getting a goverment insured mortgage? There seems to be more and more restrictions for flippers...
Tom and Jeri
www.TuCasaInvestors.com
www.TuCasaRealtyllc.com
I just learned about the 90 day re-sale rule yesterday when I was chatting with a realtor :/
But I don't know much about it
"You gain strength, courage, and confidence by every experience in which you stop and look fear in the face. Do the things you think you cannot do. Tough times never last, but tough people do"
Although there is a 90 day rule, i read HUD has a waiver until December 2011. However, they have some restrictions like you cannot resell for more than 20 percent of your purchased value. Not that attractive but i guess they are trying to work with investors. None of these apply to conventional loans or cash buyers...
Tom and Jeri
www.TuCasaInvestors.com
www.TuCasaRealtyllc.com
Tom and Jeri,
I believe these rules only apply when you purchase the properties with an FHA loan, regardless of it being a HUD home...
If you pay cash for a HUD property, you can do whatever you want to with it...
Below is an article about the 90 days extension until end of the year...
http://www.behindthemortgage.com/2011/01/good-news-for-the-housing-marke...
Learning and progressing every day,
Valerie
Valerie
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"I believe in angels, the kind that heaven sends; I am surrounded by angels, but I call them friends" - Unknown
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