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FHA Property Flipping Rule Waiver Extended

FHA has extended the temporary property flipping waiver that allows lenders and the property disposition firms they hire (or with whom they are affiliated) to sell properties on which they have foreclosed without regard to FHA’s 90-day seasoning requirement. The waiver is in effect for loans with purchase agreements signed by the borrower and seller on or before May 10, 2010.

From FHA Letter 06-14ML

Exceptions to 90-day Restriction

The following sales are exempt from the time restrictions provided by 203.37a:

• Sales by HUD of its Real Estate Owned
• Sales by other United States Government agencies of single family properties pursuant to programs operated by these agencies.
• Sales of properties by nonprofits approved to purchase HUD-owned single-family properties at a discount with resale restrictions.
• Sales of properties that are acquired by the sellers by inheritance.
• Sales of properties purchased by employers or relocation agencies in connection with relocations of employees.
• Sales of properties by state and federally charted financial institutions and Government Sponsored Enterprises.
• Sales of properties by local and state government agencies.
• Upon FHA’s announcement of eligibility in a notice (i.e., ML), sales of properties located in areas designated by the President as federal disaster areas, will be exempt from the restrictions of the property-flipping rule. The notice will specify how long the exception will be in effect and the specific disaster area affected.