FHA Flipping Rule

Wanted to share with you some valuable information that lenders must all abide by for Anti Flipping guides for purchase transactions:

FHA LOANS:

•· Foreclosures: if currently owned by a bank as a Foreclosure there is no Title seasoning required, buyer can purchase and close anytime.

•· Private Investor Purchases Bank Owned/Foreclosure/Auction: If a private investor purchases a property from a bank/foreclosure/auction, and flips property, that investor must be on Title 90 DAYS before new purchaser can close.

•· Private seller to another Private seller, (no foreclosure or short sale): Current owner must be on Title 90 days before new purchaser can close

•· Short Sale: Current owner must be on title 90 days before new purchaser can close (most likely current owners already on title for more than 90 days)

CONVENTIONAL: No one standard flipping rule currently. However, most lenders will have internal flipping rules, that override Fannie Mae/Freddie Mac guidelines. If there has been a significant increase of value within a very short period of time, bank may request an independent field review of appraisal. Additional documentation may be requested if investor flips property and value is significantly increased. There are other additional requirements and each bank may have their own rules, so be vigilant of flips!