90 Day Flipping Waiver Set to Expire
Currently, the 90 day flipping waiver that is in place allows properties to be re-sold within 90 days and the seller won’t come under any specific exemptions that apply to the 90-day rule.
However, this waiver is set to expire on December 31st, 2011!
HUD has not issued an extension on this waiver at this time. To make sure you’re eligible for the current 90 day flip, make sure your case number is ordered BEFORE December 31st. Reminder: a case number can only be ordered on active applications with borrowers.
The below are the following changes you should anticipate come 2012 for any FHA transactions where the subject property is being resold within 90 days of the previous acquisition and the sales price of the subject property is 20% or more above the seller’s acquisition cost:
1. Loans must be locked with Wells Fargo.
2. A 2nd full FHA appraisal is required and must be ordered from RELS Valuation. The appraisal cannot be paid by the borrower. The appraisal must verify the property seller has completed sufficient renovation, repair and rehabilitation work on the subject property to increase the value of the home.
3. An independent home inspection is required. At a minimum, the inspection must include the property structure, exterior, roofing, all interiors, all insulation, all ventilation systems and all health items.
4. All transactions must be arms-length and the seller must hold title to the property. Lender must ensure that there are no inappropriate agreements between the parties.
5. Loan must be submitted to Audit Review and Underwriting Management 2nd sign once all conditions are reviewed and cleared.
For more information, please contact your Guaranteed Rate loan officer.