;color:#17365D'>Yes,
that's right! The FHA is waiving the 90-day 'no flipping rule'
which prevented many investors from purchasing distressed homes and then either
immediately or in some circumstances before they actually close title selling
the property to another buyer. This practice is referred to as "flipping"
and the buyer is called an "end buyer". The waiver takes effect on
February 1, 2010 and is limited to those sales that meet specific conditions.
Eliminating FHA financing almost ended investor interest in distressed
properties due to the fact that today more than 45% of new mortgage loans
originated are FHA loans. Here is my interpretation of the Waiver: First; all
transactions must be arms length, with no identity of interest between the
buyer and seller or other parties participating in the sales transaction.
Basically no inappropriate collusion or agreements between the parties. The
seller must hold title to the property so therefore the investor must close
title on the property before title is taken by the end buyer. An LLC,
Corporation or Trust must operate in accordance with state and federal laws.. No
previous flipping activity within a 12-month time frame. The property was
marketed openly and fairly. Second; if the end buyer sales price is 20% more
than the seller's acquisition cost, condition apply. The end buyer's
lender must have supporting documentation and/or another appraisal which
verifies that the seller made sufficient legitimate renovations, repairs, and
rehabilitation work to the subject property that substantiates the increase in
value. The lender must order an inspection and provide the inspection report to
the buyer before closing. Third; the waiver is limited to forward mortgages,
and does not apply to the Home Equity Conversion Mortgage (HECM) Program.

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