While FHA will allow quick resales (as soon as you want), not all banks that do FHA loans will do them in the first 90 days. In other words, some banks still adhere to the old FHA guidelines, even though FHA doesnâ€™t require it. There are a lot of banks that will now do FHA loans immediately, so ask around to a couple loan officers or brokers and find a bank or two that will do an FHA loan without any time restriction; most of the regional banks will do these, but even big banks like Wells Fargo are now doing them. So, just because one or two banks say no, donâ€™t give up.
If you plan to resell within 180 days, expect that you will need to have two appraisals on the property. Also note that the second appraisal canâ€™t be paid for by the buyer â€” so either you (the seller) will need to pay for it, or the broker/lender will need to pay for it. This should be negotiated upfront so there are no surprises.
If you plan to resell within 180, expect that the lenderâ€™s underwriter will require you to furnish details of the rehab. This may include renovation details, invoices, receipts, etc â€” anything to substantiate the work youâ€™ve done.
If you plan to resell within 180 days, you will need to do enough improvements to justify the higher resale price. There are no specific guidelines on how much work you must do, but if the appraiser or underwriter feels that you havenâ€™t done enough work to justify the new resale value, your appraisal will likely come in low, regardless of comps.
If there has been a â€œpattern of flippingâ€ (in this case, that means there has been more than one title change other than an actual foreclosure) in the past year, the lender will likely reject the loan and you may be required to wait 6-12 months to resell to an FHA buyer. This often occurs when an investor purchases from a wholesaler, rehabs and then plans on a quick resale â€” there are two title changes from the wholesaler to the flipper to the end-buyer, which will be a red-flag for an underwriter, so be aware of this potential issue when buying from wholesalers.