Home Buying in Temecula>Question Details

FHA Buyer, Home Buyer in California

Was the flip waiver extended?

Asked by FHA Buyer, California Thu Jan 20, 2011

I have seen a few articles stating it was, is this accurate?

(http://www.realestateinvestingnewswatch.com/2011/01/fha-exte…)

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7
All good answers below. Yes, this was extended. You may be interested in this article: http://www.housingwire.com/2011/01/21/fha-suspends-anti-flip…

If they're really trying to help, I think they should remove the cap on the seller's profit margin. Right now they are capped at 20% above acquisition cost.

All the best!

Ryan Smith
2 votes Thank Flag Link Fri Jan 21, 2011
Yes, Frustrated FHA, the policy was extended today. Of course, this is California, so you may find that some haven't jumped on the band wagon, but since this policy was changed a year ago, you should be ok now.

The trick is working with a Lender who is well versed in FHA loans. If you need a referral, I know of a dynamite lady who knows not only FHA, but VA loans, forwards, backwards, and all around the middle.

I'm a Realtor myself and I find that making it a practice of using and referring only the best professionals ensures a smooth transaction for my clients. If I can ever be of assistance, I'd be greatful for the Opportunity.

Happy House Hunting.
1 vote Thank Flag Link Thu Jan 20, 2011
I recently had an FHA buyer purchase a flip property with no issue at all. The lender was very well versed on all of the challenges of getting this loan through. It really is as Greg says, up to the lender and how they do business.

~~~
1 vote Thank Flag Link Thu Jan 20, 2011
Frustrated, the flip waiver was extended for another year.
HOWEVER, it's a lender to lender decision on whether they will originate loans on flip properties.
Some flat out won't, others will with stipulations, and others (like the company I work for) it's business as usual.
Hope this helps
Good luck!
Web Reference: http://firsttimehome.us
1 vote Thank Flag Link Thu Jan 20, 2011
FHA has lifted the ban on flipping, question is have the banks that are underwriting the loans? I just left a meeting with the owner of my company and he said we are ready to go when the out investors approve the waiver. Our biggest FHA investors are Wells Fargo, US Bank, and GMAC, not all in that order. Wish I had some better news for you from here and I will update as status changes. Good Luck!!

Matt Puzz
Licensed Loan Originator
Amerifirst Financial, Inc.
1910 S. Stapley Drive #209
Mesa, AZ 85204
Direct: 602-410-9333
Office: 480-682-6617
Fax: 480-344-3687
NMLS# 213777 AZ LO-0915068
Apply Online: http://www.mattpuzz.com
1 vote Thank Flag Link Thu Jan 20, 2011
Here's the actual waiver text: http://www.hud.gov/offices/hsg/sfh/currentwaiver.pdf

-Steve
0 votes Thank Flag Link Fri Jan 28, 2011
Here is an email I received from one of my preferred lenders this week. Princeton Capitol.

Flips are still a hot topic in the industry. Some of lenders – BofA and US Bank – are telling us that they will not purchase them under any circumstance and the private mortgage insurance companies are making it virtually impossible to approve. So, with flips you are best to have 20% down.

We have been funding many flips on a case by case basis but they will endure a great deal of scrutiny. A flip is when the current owner has been on title less than 90 days. Date of ownership is determined by the date the deed recorded, not the date purchased on the County steps.

Hot points which subject the loan to even more intense scrutiny are…
· Contracts written within the first 30 days after the seller has taken title. This raises a lot of questions. Was the property marketed at all? Is there a relationship between buyer and seller? How can a big price increase be justified when little or no improvements have been made? The industry is very wary of these transactions.
· More than one flip in the last 12 months.

Although HUD came out in 2010 and said that they would allow FHA mortgage insurance on flips (owned for less than 90 days), the guidelines were so restrictive that it made it a not workable solution.

If you want to lessen the scrutiny, then write your offer on the 91st day.

If your buyer has less than 20% down, it is imperative that you know the property history. I highly recommend that you write your offer on the 91st day. And yes, the underwriters count the days…Day 90 is still a problem; on day 91 you fall outside of the flipping guidelines and you are OK to proceed without any flipping overlays. For now, at least.

If you have any questions or a particular scenario, please feel free to call me.
Stefani
Web Reference: http://terrivellios.com
0 votes Thank Flag Link Thu Jan 20, 2011
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