Several blogs and newspaper articles have announced a temporary suspension to the FHA flipping rule. The intent is not to bring back predatory investment house flippers, but to help lenders move their foreclosure inventory.
The first blog I read this in was http://www.activerain.com/blogsview/553519/We-Can-Flip-Bush .
I verified the change with these articles at CNNMoney.com and Zimbio Business .
FNMA, FHMLC, federally chartered banks and other government related lenders have always been able to obtain a waiver to the FHA flipping rule. Now other lenders will be able to sell their inventories with FHA financing.
Initial thoughts were that this will probably also bring on a new waive of house flipping, as investors take advantage of this change in policy, but see the blog update below. It will certainly help lenders deal with the increasing numbers of foreclosed property to be able to access more buyers with FHA financing.
One of the thoughts behind this move is to encourage lenders to spend the necessary money to bring the properties up to FHA standards. The belief is that this will help stabilize values and generally upgrade neighborhoods that are being hurt by large numbers of foreclosures.
In Chattanooga, where our foreclosures are rapidly increasing, it will help sustain our property valuations. Lenders are now encouraged to perform property repairs so that the homes will pass FHA standards.
Repaired properties will bring higher prices.
The increased buyer pool caused by the availability of FHA financing, will also bring higher prices.
This is generally good news. I continue to check for more details.
Update
The FHA order waiving the flipping rule for mortgagees is found here at this link
My reading of the order is that it only applies to foreclosure properties. This will keep in force the effort to restrict investor property flipping.
I first saw the actual order copied in a post by Josh David.
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Richard- Your post is great I really am new to FHA and needed this info. so much right now!!!
Your info is really right on the money I am glad to have great people like you helping each other out!!!
If you need anything out here in Texas please count on me...
Lots of people need this info.
I saw your blog posting about foreclosed properties. We offer a great tool to help you in competitive REO listings. www.foreclosurefeedback.com . The Asset manager's can login and see all of the feedback on their REO properties, see what you are doing to market them and print reports to document the need for price reductions. Call in to sign up instead of online and tell them Rick said to give you the first 90 days for free to try it out at 858-270-1055 ext 113. If your competition doesn't offer this, you will definitely have a leg up on them.
Rick
Fantastic news for us flippers. We don't always need to move the house in 90 days but if you can take a distressed property and move it fast, all the better. As a side note some properties you can call distressed because the banks don't know how to market them. I've seen a few properties in the last several months which are cut and shaves (paint and cosmetic items) but because the bank thinks that simply listing a house on MLS will create demand for the property, its sits for over 270 days. Now I can walk in, paint, and sell.