Minnesota Mortgage
FHA UPDATE ON “Flipping”
January 7, 2012 by Financemyhome · Leave a Comment
90-Day Seasoning Waiver ExpandedThis update from FHA was released late last week as an industry email without a corresponding Mortgagee Letter and contains information about FHA’s policies regarding the waiver of the 90-day seasoning required for sellers.
Here are the 6 things you need to know:
1. The extension is effective through December 31, 2012, unless otherwise extended or withdrawn by FHA.
2. Investors continue to be exempt from the 90-day seasoning rule.
3. All transactions must be arms-length.
4. No identity of interest can exist between buyer and seller.
5. If sale price is 20% or more of the seller’s acquisition cost, the lender must:
a) provide supporting documentation and/or a second appraisal and
b) order an inspection of the property and provide it to the buyer.
6. The waiver is limited to forward mortgages only.
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