In today’s issue of the Federal Register (Vol. 76, No. 249, Pages 81363 – 81365) the Federal Housing Administration (FHA) published notice that it is extending the waiver of the FHA Regulation prohibiting property flipping in connection with FHA insured loans until December 31, 2012. The notice Summary (redacted for brevity) is republished below: This notice announces that FHA is extending the availability of the temporary waiver of its regulation that prohibits the use of FHA financing to purchase single family properties that are being resold within 90 days of the previous acquisition, until December 31, 2012. This waiver, which was first issued in January 2010, took effect for all sales contracts executed on or after February 1, 2010, and was extended in February 2011. The waiver is set to expire on December 31, 2011, and therefore HUD is extending the waiver for another calendar year. Prior to the waiver, a mortgage was not eligible for FHA insurance if the contract of sale for the purchase of the property that is the subject of the mortgage is executed within 90 days of the prior acquisition by the seller and the seller does not come under any of the exemptions to this 90-day period that are specified in the regulation. The waiver is applicable to all single family properties being resold within the 90-day period after prior acquisition. Additionally, the waiver is subject to certain conditions, and eligible mortgages must meet these conditions to take advantage of the waiver [See pages 81364 – 81365 of the Notice]. The waiver is not applicable to mortgages insured under HUD’s Home Equity Conversion Mortgage (HECM) Program. To read the complete Notice please visit http://www.gpo.gov/fdsys/pkg/FR-2011-12-28/pdf/2011-33411.pdf.
