FHA extends the property flip waiver for properties owned less than 90 days…
We're starting off 2012 with some great news! There were 2 significant announcements FHA made at the end of 2011. First, the FHA loan limit for Maricopa County will remain at $346,250 through 2012! We had a brief period of time last fall when we had to implement FHA's lower loan limit of $271,050 and there was no doubt we missed the flexibility of lending up to $346,250. Be sure to let your prospective buyers know the loan limit will be in force throughout 2012 and that there's a strong chance the limit will decrease next year. Carpe Diem!
Second, FHA's 90 day property flipping waiver, which was set to expire December 31, 2011, has been extended through December 31, 2012 unless otherwise extended or withdrawn by FHA. All other terms of the existing waiver remain the same. It's been a while since we last reviewed the FHA rules on properties flipped and owned less than 90 days. Here are a few reminders:
- All transactions must be arms-length, with no identity interest between the buyer and seller or other parties participating in the sales transaction
- If the sales price of the property is 20 percent or more above the seller’s acquisition cost, the lender must meet 2 specific conditions:
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- Justify the increase in value by obtaining a second appraisal (the buyer can not pay for the second appraisal) and
- Review the property inspection (underwriting may call for repairs from the property inspection if they pose a health and safety risk or are required to be repaired to comply with FHA guidelines)
- Seller must hold title to property
- No previous flipping activity exists for the subject property within the preceding 12 months
- Property must have been marketed openly and fairly via MLS, auction, for sale by owner or developer
Thanks to Kelley Zitlow for this great FHA Update. You can reach Kelly at Cherry Creek Mortgage. Licensing: AZ Mortgage Banker License #BK-0904024
Direct: 480-398-4908
Web Site: www.kellyzitlow.com
Email: kellyzitlowgroup@ccmclending.com
Brent Hammonds, Associate Broker, CDPE
Solutions Real Estate, LLC
9375 E. Shea Blvd STE 251
Scottsdale, AZ 85260
Phone: 602-717-3219
Fax: 877-500-1776
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