"Did you hear the news?"
Daily Real Estate News | February 1, 2010 |
FHA Relaxes Anti-Flipping Rule
Beginning Feb. 1, the Federal Housing Administration will provide mortgage insurance for some purchases in which the seller bought the property and held it for fewer than 90 days.
The agency is changing what is known as the “anti-flipping rule” to speed up sales of renovated homes in communities with too many bank-owned and foreclosed homes, says FHA Commissioner David H. Stevens.
Waiving the 90-day rule will encourage private investors to buy vacant properties, fix them up, and quickly sell them to buyers who will be eligible to buy them using FHA financing.
FHA's change "is going to be absolutely terrific" for first-time home buyers hoping to take advantage of the tax credit, says Bobby Taylor, an associate with Coldwell Banker Mountain West Real Estate in Salem, Ore.
Source: Washington Post (01/30/2010)
Its great news for real estate investors and home buyers in Southeast Texas. The anti-flipping rule makes it harder for investors to make a profit when they buy a home, fix it up, and sell it in a short time frame. Investors don't want to buy and hold for a long time because it eats away at their profit margin. One rule that may still apply to investment properties is the two appraisal rule. FHA financing has recently required two appraisals on any home that has been owned for less than twelve months. It seems redundant to have two appraiser both with the same certifications and license have to appraise the same property. Lenders today just can't be too cautious.
At least the change to the "anti-flipping rule" is the first rule change aimed at encouraging investors to buy homes that has come along in quite a while. Ready to buy your first investment property and flip it? Call me and I'll find you some fixer uppers with great potential.