The FHA has extended its property anti-flippng rule through the end of this year. Instead of the usual 90 day rule, the FHA will insure a mortgage on a home owned for less time. So FHA insured financing is still up for grabs on solid deals.
They’re hoping this will stabilize prices and stem the tide of foreclosure activity. So despite a home being neglected during possible abandonment it will still be possible to make quick work of them with this hurdle removed. Obviously they’re also hoping to curb dishonest property flipping which can catch unwary buyers, but it’ll be a test of the program to see if the guidelines are strict enough.
Some of the limitations include:
– if the sale price is 20% higher than the acquisition cost then a whole slew of new conditions must be met
– it’s limited to forward mortgages
– it doesn’t apply to the Home Equity Conversion Mortgage for purchase program
While it may be a small drop in the overall housing bucket the program has approved 42,000 mortgages since the beginning of 2010 which otherwise would have been rejected. It does not mean that those properties didn’t enter foreclosure at some later point, but the turnover in the market and its ability to deal with the foreclosure inventory should be some positive news for investors.
So don’t fret – try to find the deals that are staring you in the face. Don’t forget your dreams, don’t let lame excuses scare you off, and DO get up off the couch this year!