FHA
flipping policy
In
an effort to stimulate repairs and sales in neighborhoods hard hit by the
mortgage crisis and recession, the FHA waived its standard prohibition against
financing short-term house flips. Before the policy change, if you were an
investor or property rehab specialist, you had to own a house for at least 90
days before reselling — flipping it — to a new buyer at a higher price using
FHA financing. Under the waiver of the rule, you could buy a house, fix it up
and resell it as quickly as possible to a buyer using an FHA mortgage —
provided that you followed guidelines designed to protect consumers from being
ripped off with hyper-inflated prices and shoddy construction.
