Expiration of the Federal Housing Administration's Property Flipping Waiver

The following information comes to us via a well-known loan officer in the Henry County Market.  Her name is Debbie Miller with Heritage Bank in McDonough, GA.

Debbie Miller is an AVP, Mortgage Banker and can be reached at 770-288-3155, office or 770-630-6579, cell.

Today, the Federal Housing Administration’s (FHA) Office of Single Family Housing announced that the temporary waiver of FHA’s regulation that prohibits the use of FHA financing to purchase single family properties that are being resold within 90 days of the previous acquisition, expires on December 31, 2014.

The waiver applies to all sales contracts executed on or after February 1, 2010, until 11:59 PM, December 31, 2014. FHA deems a sales contract to be executed when all parties to the contract have signed the contract, and the contract is enforceable under the law of the state the property is located. Mortgages that are made on properties in which sales contracts have been executed after 11:59 PM, December 31, 2014, are not eligible for a waiver of the regulation prohibiting property flipping.  

FHA will not extend the waiver beyond December 31, 2014.
Section 203.37a(c) lists the sales transactions exempt from this rule.The exempt transactions include sales by HUD of real estate-owned (REO) properties under HUD’s regulations in 24 CFR part 291, sales by other federal agencies of REO properties, sales of properties by nonprofit organizations that have been approved to purchase and resell HUD REO properties, sales by state- and federally-chartered financial institutions and government sponsored enterprises (GSEs), and, upon announcement by HUD through issuance of a notice, sales of properties in areas designated by the President as federal disaster areas.  The regulation, including its exemptions, is still in effect.