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    FHA FLipping:Under the 90 days must meet all ten requirements

    FHA Flipping: Under the 90 days must meet all ten requirements:

    I recently thought that the lifting of the 90 day ban on flips for FHA financing was going to make it easier for investors like myself to sell my properties and easier for buyers to purchase these investment flips by taking out the 90 day rule. In trying to sell one of my properties recently I found out it is actually harder if the property has been held less than 90 days. Granted the rule was used for good reason, and I’m not here to dispute the validity of the rule, as it stopped a lot of predatory lending and flipping practices just wanted to educate investors and realtors alike, on what it entails. You could enter into a transaction, not knowing, that has no chance of getting to the table. So make sure you know this information.
    The 90 day rule has been lifted but, the property has to meet ten out of ten requirements before FHA will finance it, if the current owner has held title for less than 90 days. Here are the ten:
    1. Sales price cannot exceed 20 %( If seller paid $100,000 the new sales price cannot exceed $119,999).
    2. Must be an Arms Length transaction.
    3. Based on contract dates 2/1/2010 to 2/1/2011.
    4. LLC’s are allowable/borrower cannot be affiliated with the LLC.
    5. Loan Safe report will be pulled on every loan.
    6. 12 month chain of title-with evidence of no flipping activity.
    7. Property was exposed to open market.
    8. Appraisal: comments on improvements with photos, specific comments to acknowledge increase & support value.
    9. Re-dating contracts not allowed
    10. Buyers agents cannot be seller/Buyers agent cannot be employed by, related to or affiliated with the seller.
    All utilities have to be turned on for the appraisal, and the property must conform to the minimum HUD standards.
    Again, the 90 day rule along with these requirements hedge the flipping scams that are out there, but just be aware of these rules, because this is something new, and most agents are not privy to this information.

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