90 Day Anti-Flipping policy is waived for one year by HUD!

Have you gotten an accepted offer on a house only to find out that this is a flipped property and FHA will not insure your loan until the 91st day?

If this has happened to you worry no longer. For one year HUD is waiving this requirement with a few restrictions.  Here is the update from National Association of Mortgage Brokers:

On January 15, 2010, the U.S. Department of Housing and Urban Development (HUD) issued a Waiver of Requirements of 24 CFR Sec.203.37a(b)(2).  This regulation provides that a mortgage for a property will not be eligible for FHA insurance if the contract of sale for the purchase of the property is executed within 90 days of the prior acquisition by the seller, and the seller does not come under any of the specific exemptions that apply to the 90-day rule.

The waiver takes effect on February 1, 2010 for a one-year period, and is limited to those sales meeting the following conditions:

1.    All transactions must be arms-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 price of the property is 20% or more over and above the seller’s acquisition cost, the lender must:
a.    provide supporting documentation and/or a second appraisal;
b.    order an inspection of the property and provide it to the buyer
3.    Limited to forward mortgages, and does not apply to the Home Equity Conversion Mortgage (HECM) for Purchase program.

You can also go directly to HUD site for information on the Flipping Waiverin Greater detail.

Please consult your mortgage professional on how and if this will affect any transaction that you are seeking or currently in. The waiver starts on the 1st of February.