Federal Housing Commissioner Brian D. Montgomery has extended the temporary property flipping waiver to May 10, 2010. Under the waiver, homes that were foreclosed on and are being sold by the mortgagee or on its behalf may be purchased by FHA borrowers without regard to the 90-day seasoning period. The waiver does not apply to entities that purchase foreclosures either singly or in bulk for resale. Subsequent sales of such properties will continue to be subject to the standard regulatory requirements.
The waiver expires for all loans for which the sales agreements were signed by the seller and buyer on or before May 10, 2010.
What all this means is that a person who purchases a home (more than likely a home that is in foreclosure or at a sheriff sale) with the idea of putting a little elbow grease into it and then putting it back on the market to try to resell it would have to be listed on the title of the home for a minimum of 90 days prior to the date of an offer to purchase for that property IF the person buying the home is financing it with an FHA loan. FHA will make an exception (as stated above) for a bank or it's representative who is attempting to sell a foreclosed or repossessed home.
Posted by Jolenta Averill
For more information on buying or selling distressed properties, please call Lake & City Homes broker owner Jolenta Averill at (563) BUY-SOLD (563-289-7653).