There is some good news for the Las Vegas Real Estate market and home buyers wishing to purchase a home with FHA financing that was sold at a trustee sale and now on the market for sale (aka "flipped").
The Federal Housing Administration has extended the suspension of its ‘anti-flipping rule’ through the remainder of 2011.
FHA regulations typically prohibit insuring a mortgage on a home owned by the seller for less than 90 days, but in February of last year, FHA temporarily waived this regulation through January 31, 2011, noting that in today’s foreclosure-ravaged marketplace, the agency’s research has shown that acquiring, rehabilitating, and reselling distressed properties often takes less than 90 days.
The waiver contains strict conditions and guidelines to protect FHA borrowers against predatory practices of “flipping” where properties are quickly resold at inflated prices. The agency’s anti-flipping waiver is limited to those sales meeting the following criteria:
- All transactions must be arms-length, with no identity of interest between the buyer and seller or other parties participating in the sales transaction.
- In cases in which the sales price of the property is 20 percent or more above the seller’s acquisition cost, the waiver will only apply if the lender meets specific conditions.
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