HUD Extends "Anti-Flipping" Waiver
On Friday, January 28, 2011, the U.S. Department of Housing and Urban Development (“HUD”) announced that it was extending the “anti-flipping” waiver through December 31, 2011.
As a general rule, FHA regulations prohibit insuring a mortgage on a home which is owned by a seller for less than 90 days. However, given the continued foreclosure crisis, HUD has extended the waiver of this requirement for the duration of 2011 to promote the quick resale of homes.
According to HUD, this waiver is limited to those sales of homes which meet the following general 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.
● In cases in which the sales price of the property is 20 percent or more above the seller’s acquisition cost, the waiver will only apply if the lender meets specific conditions.”
Finally, this waiver will apply to the purchase of HUD-owned properties, bank-owned properties, or properties resold through private sales.