FHA Finalizes Anti-flipping Fraud Rules
FYI:
FHA finalizes anti-flipping fraud rules
Under new federal rules meant to discourage property flipping, only the home owners listed on recorded documents can sell properties slated for Federal Housing Administration-backed financing.
The rules take effect on July 7.
Additionally, FHA financing will not be available for homes sold within 90 days of purchase. Sellers will have to provide additional valuation data to unload properties between 91 and 180 days after the last transaction, in cases where the new sales price is 100 percent or more higher than the previous sales price.
There are many agencies and classes of properties exempt from the anti-flipping rules. They include: The U.S. Department of Housing and Urban Development, Fannie Mae, Freddie Mac, lenders unloading their real estate owned portfolios, local or state housing agencies, nonprofits with HUD permission to purchase discounted REO properties, inherited properties, and dwellings located in presidentially declared disaster areas.
Chris
Chris,
Generally speaking, these rules have been in effect since November 2004 in DRAFT form. That HUD has chosen to make its draft the final form is the news, not that we have new rules for us as investors or our buyers.
Stockpro- The owner is not necessarily recorded as such, such as in a sub-to where the transfer has been made through an unrecorded land contract. I would think this also might affect people who get a property on an assignable purchase contract then try to assign it to someone else.
Newkid- this was flashed by the Michigan Association of Realtors like it was big news, so I thought I would pass in on.
Chris
Having some context for the message does change the emphasis of the information.