Federal Housing Administration (FHA) guidelines do not permit a buyer to purchase a home with an FHA-insured mortgage if the home being purchased has been owned by the seller for less than 90 days. However, the FHA a extended it’s temporary waiver of this “anti-flipping” regulation through December 31, 2012 while keeping all other terms of the FHA guidelines for flipping in effect so as to prevent predatory or otherwise unscrupulous practices.
So, in 2012, while you CAN buy a property that has been owned by a seller for less than 90 days, the following requirements must be met: 1) the transactions must be arms-length (no shared interest between the buyer and seller or any other participants to the transaction), 2) if the property is being re-sold for more than 20% above what the seller paid for the property, additional documentation will be necessary to justify the increase in value and there will be additional conditions for the lender to meet, and 3) this does not apply to the Home Equity for Conversion Mortgage (HECM) program for purchasing properties.
For more information about the FHA flip waiver, read the FHA press release. If you would like to learn more about about your purchasing power in this market,  email Leaf, Realtors or by calling  or our Broker, Kelly Gordon, at 908-975-9756.