Anti-flipping policy on homes sold in less than 90 days is lifted.

Happy January !  

For those of you interested in buying and rehabbing houses to sell again……Here is some news just for you or for someone you know who could use this information.

As of February 1, 2010 and lasting for one year unless extended the anti-flipping policy on homes sold in less than 90 days is lifted.

That means an investor can buy and home and flipit right away and the buyer can use an FHA loan.

Most likely the date of the contract would have to be February 1, 2010 or later.

There are conditions you should be aware of which I have sent in an attachment above.

Call me if you have questions and remember…….I am here to keep you informed, help you succeed and have a seemless transaction from start to finish !


Diane Hall


The text of HUDs press release is reproduced below:

Pursuant to §7(q) of the Department of Housing and Urban Development Act (42 USC 3535 (q)) and 24 CFR 5.110, I hereby waive §203.37a(b)(2) of the regulations. The regulations at 24 CFR §203.37a(b)(2) provide 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.

This waiver, which takes effect on February 1, 2010, is limited to those sales meeting 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. Some ways that the lender can ensure that there is no inappropriate collusion or agreements between parties is to assess and determine the following:

  • The seller holds title to the property;
  • LLCs, corporations, or trusts that are serving as sellers were established and are operated in accordance with applicable state and Federal law;
  • No pattern of previous flipping activity exists for the subject property, as evidenced by multiple title transfers within a 12-month time frame (chain of title information for the subject property can be found in the appraisal report);
  • The property was marketed openly and fairly, via MLS, auction, For Sale by Owner offering, or developer marketing (any sales contracts that refer to an “assignment of contract of sale,” which represents a special arrangement between seller and buyer may be a red flag).


In cases in which the sales price of the property is 20 percent or more over and above the seller’s acquisition cost, the waiver will only apply if the lender:

  • Justifies the increase in value by retaining in the loan file supporting documentation and/or a second appraisal which verities that the seller has completed sufficient legitimate renovation, repair, and rehabilitation work on the subject property to substantiate the increase in value or, in cases where no such work is performed, the appraiser provides appropriate explanation of the increase in property value since the prior title transfer: and


  • Orders a property inspection and provides the inspection report to the purchaser before closing. The lender may charge borrower for this inspection. The use of FHA-approved inspectors or 203(k) consultants is not required. The inspector must have no interest in the property or relationship or with the seller, and must not receive compensation for the inspection from any other party than the lender. Also, the inspector may not compensate anyone for the referral of the inspection. Additionally, the inspector may not receive any compensation for referring or recommending contractors to perform any repairs recommended by the inspection, and may not be involved with performing any repairs recommended by the inspection.

At a minimum, the inspection must include:

  • The property structure, including the foundation, floor, ceiling, walls and roof;


  • The exterior, including siding, doors, windows, appurtenant structures such as decks and balconies, walkways and driveways;


  • The roofing, plumbing systems, electrical systems, heating and air conditioning systems;


  • All interiors; and All insulation and ventilation systems, as well as fireplaces and solid-fuel-burning appliances.


The waiver is limited to forward mortgages, and does not apply to the Home Equity Conversion Mortgage (HELM) for Purchase program.

Published by dianebroussard

Specialties: Real Estate Horse Property Specialist, Buyer's Agent, Listing Agent, Consulting Also Reiki Master, Shamanic Practitioner, Life Coach Consultant I have been developing and selling real estate since 1976. I am a lifetime top achiever and member of Remax Hall of Fame. I specialize in Horse and Ranch property. One of the most important things I have learned over the years, is to LISTEN to the needs of my clients. I do not try to sell them a home; rather, I try to help them find the home of their choice. A home is one of the most important decisions you will make in your lifetime and finding the right agent to help you do it , is most important, after all you are trusting them to help you with this decision. I know it is more than just seeing a home on the internet, it is feeling the home in your soul. It is about how you feel when you walk through the front door and the way you can instantly envision your life unfolding there. I tell clients to drive around different areas first to see what area feels good to them. Then we can find a home in that area. My clients are most important to me and seeing them smile makes me smile. This is about more than real estate. It is about your life and your dreams.It is my sincere pleasure to help Diane

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