With the high level crime and scam activities seen in recent years relative to quick buy and sell practices in real estate, regulators attempted to slow the activity when lending was involved. Restrictions were imposed to slow the turnover period to allow time for review, investigations, verifications and a seasoning of one loan or purchase before doing a sale.
The FHA recently made modification to its rule relative to the 90 day cure or seasoning time period. The FHA issued a waiver of the property flipping prohibition under specific terms as outlined in Property Flipping Waiver guidelines. "The agency[changed] what is known as the "anti-flipping rule" to speed up sales of renovated homes in communities with too many bank-owned and foreclosed homes," said FHA Commissioner David H. Stevens. Waiving the 90-day rule will encourage private investors to buy vacant properties, fix them up, and quickly sell them to buyers who will be eligible to buy them using FHA financing. There are stipulations that still remain in the FHA lending programs, but they have been loosened considerably permitting the relatively quick turn-around of sale after purchase, known as flipping. This change had a significant effect in the market for those first-time home buyers who participated in the tax credit offering.
St. George REALTOR® Jim Coleman is Associate Broker and Partner/Owner of ERA Brokers Consolidated. He Specializes in Residential, Investment and Commercial Real Estate, holding National Designations of Accredited Buyers Representative (ABR), Certified Residential Specialist (CRS), Resort and Second Home Property Specialist (RSPS), Seniors Real Estate Specialist (SRES), Certified International Property Specialist (CIPS), GREEN Property Specialist, and Certified Short Sale and Foreclosure Resource Specialist (SFR). You can contact him by e-mail at Jim@JimColeman4Homes.com. Call: (435) 627-5411; or write: Jim Coleman, 201 East St. George Boulevard, St. George, Utah 84770. This and other columns are available at www.WinningTalk.com/articles.