Recently, HUD enacted a ruling that a property could not be purchased and resold in less than 90 days. Well, you could, but the property would not be eligible for FHA insurance meaning the buyer could not qualify for FHA backed loans.
Effective February 1, 2010, this 90 day waiting period is waived.
There are conditions, of course. Some of them include:
- the transactions must be arms length. There must be no interest between the buyer, seller and/or any other party to the transaction.
- no additional flipping activity exists during the previous 12 month time frame for the subject property
- the property was marketed openly
- if the sales price is more than 20% above the sellers purchase price, increase in value must be justified by supporting documentation and appraisal as well as inspection
Why is this unnecessary 90 day wait period finally being waived (even if temporarily)?
