FHA has extended the temporary waiver of the less than 90-Day Anti-Flipping Rule and our servicers have fallen in line. The extension permits buyers to continue to use FHA financing to purchase HUD-owned properties, bank owned properties and properties resold through private sales through 2011.
1) The minimum credit score to these transactions is 640.
2) Two appraisals are required to support the property value when the increase is greater than 120% in less than 90 days.
3) Justify the increase in value by retaining in the loan file supporting documentation and a second appraisal, which verifies that the seller has completed sufficient legitimate renovation.
4) Property was marketed open and fairly through listing service (MLS).
5) A home inspection ordered in the borrowers name is required when the property value increase is greater than 120%.
6) Multiple flips of the subject property are not permitted.
7) Receipts for materials and/or contractor bids may be required to show acquisition costs.
Changes and overlays:
1) Property must be purchased from owner of record.
2) Sale or assignment of sales contract not allowed.
3) The second appraisal will impact seller concessions and
4) One of the four documents must be provided:
• Property Sales history report
• Copy of Recorded Deed from Seller
• Copy of Property Tax Bill
• Title commitment or binder
Scott Warga, is the Qualifying party for ACSI American Construction Specialists and Investigations LLC,(ROC216772) a dual licensed residential and small commercial contractor. He is also a qualified Phoenix home inspector certified by the Arizona Board of Technical Registration (#38062) and was appointed to the Arizona Board of Technical Registration’s Enforcement Advisory Committee. He has years of construction experience and has performed residential home inspections and commercial property inspections for over 10 years. He has specialized in forensic inspections, investigating failed, damaged and defective construction for over 5 years. He is a member of the American Society of Home Inspectors (ASHI), (#205826) and currently sits on their board of directors. He has been an instructor of home inspection at Mesa Community College, for Inspection Training Associates, a Kaplan Professional School and Arizona Sun-Tech Home Inspection School. He has served as District Chairman & Vice President for the Arizona chapter of the American Society of Home Inspectors and an approved instructor for both them and the Arizona Department of Real Estate. If you need an Arizona Home Inspector, he is your guy.