November 24, 2010
HIGH IMPORTANCE:
FHA PROPERTY FLIP TRANSACTIONS:
First off, there are some new changes to FHA flipping policies that you MUST be aware of ASAP. Brian Pintar - mortgage broker, just put together a short 1-minute video explaining the changes.
Effective: On / After December 1, 2010
FHA purchase transactions in which the seller has held title less than 90 days the sales price will be limited to less than 20% above the seller's acquisition cost. The seller's acquisition cost is defined as what the seller paid to acquire the subject property. It does not include the cost of any repairs or improvements made to the property after purchase.
NOTE: conventional financing, seller must be in title on the date of the contract. The 90day rule does not apply.
HOWEVER; if the buyer has less than 20% down payment; ALL MI companies require the seller to be on title a minimum of 90 days prior to going under contract.
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