Effective January 1, 2015, FHA will have let their 90 day waiver on flipped properties lapse. This means that after January 1, 2015, a borrower wanting to purchase a flip will have to wait 6 mos + 1 day to purchase.
I suspect this is going to bring an uproar in the real estate industry. I will keep you updated as things change.
So what does this mean for borrowers – for those wanting to purchase a flip they will need to be in a ratified contract, have a loan application in process AND have a case number pulled by 12/31/14. This will be difficult since everyone will be pretty much closed on 12/30/14.
This change will affect both buyers as well as sellers who are flipping properties. In my opinion, it will likely slow the sale of flipped homes and even lower the price of them in areas where FHA financing is the norm and so is flipping property since supply and demand will be affected.
Feel free to contact me if you would like to discuss this change and how it may affect you or your area.
(parts of this update were excerpted from an email provided courtesy of Peggy Valley at Summit Funding, firstname.lastname@example.org, 925-890-5255. The opinion is mine, however)