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FHA 90-day Flipping Rule
Posted on November 4, 2009
"FR-4615 Prohibition of Property Flipping in HUD's Single Family Mortgage Insurance Programs," makes recently flipped properties ineligible for FHA mortgage insurance. Keeping in mind bank owned property or change in ownership due to a death or not considered a "flip".
Re-sales occurring 90 days or less following acquisition will not be eligible for a mortgage to be insured by FHA. I have had several calls regarding what constitutes the 1st day; the date of sale, when the deed is recorded, etc.
Here is the information from HUD....
In calculating the 90 day restricted period, the first date is the date of acquisition by the seller/owner of record and not the date the deed is recorded or presented to the Division of Registry. For a purchase of a bank owned REO property, the acquisition date will be the date the bidder's non-refundable cash bid is accepted by the seller.
You can go to HUD Acquisition Date for more details.
Please keep in mind every Lender must adhere to FHA policy but they also have the right to add additional guidelines. You will want to check with your preferred Lender to find out their specific ruling on this subject to make sure you don't get yourself into a sticky situation!
As always, thank you for your questions as it provides me an opportunity to learn!
Denelle
