FHA has temporarily lifted the 90-day flipping rule for home buyers. This new guideline goes into effect on February 1, 2010 and is good for one year.
Certain criteria apply. For investors selling homes more than 20% above the investor's original sales price, FHA will want to see either proof of work completed that substantially raises the value or an appraiser's explanation as to why the value is much higher than the original price paid at auction.
It also appears that FHA may require the buyer to pay for a home inspection ordered by the lender. This sounds as though if the buyer wants to choose his or her own home inspector, the buyer could possibly end up paying for two home inspections.
This will open up a lot more possibilities for an FHA buyer, especially in Sacramento. Many first-time home buyers want to use an FHA loan. Before this new ruling, settled on January 15, only conventional or cash buyers could buy those flippers homes within the 90-day period.
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Certified HAFA Specialist
My Sacramento Real Estate Listings
Elizabeth Weintraub is an author, home buying columnist for The New York Times-owned About.com, a Land Park resident, and a Land Park real estate agent who specializes in older, classic homes in Land Park, Curtis Park, Midtown and East Sacramento. Weintraub is also a Sacramento Short Sale agent who lists and successfully sells short sales throughout the four-county Sacramento area. Call Elizabeth Weintraub at 916.233.6759. Put 35 years of real estate experience to work for you. Broker-Associate at Lyon Real Estate. DRE License # 00697006.
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