Louisville Kentucky Mortgage Loans

 FHA extends “Anti-Flipping Waiver” to Help Stabilize the Kentucky Housing Market for FHA loans

FHA extends “Anti-Flipping Waiver” to Help Stabilize the Market

Effective currently until December 31, 2011, FHA loans in Kentucky will continue to allow the 90-day waiver for all properties acquired directly from a lender, but prohibitsKentucky FHA financing for properties owned less than 90 days if the sales price is greater than or equal to a 20% increase over the seller’s acquisition cost. The 90 days is calculated from the seller’s acquisition date to the purchase contract date of the new transaction.

If the resale occurs within 0 to 90 days, the following requirements must be met:

1. All transactions must be arms-length; no identity of interest between buyer, property seller or third parties. Specific ways to ensure an arms-length transaction include:

o

Property seller currently holds title to the property. LLCs, corporations or trusts serving as property sellers must meet all applicable state and federal law.

o

No pattern or previous flipping activity exists on the property (as evidenced by multiple title transfers within 12 months.

o

The property was marketed openly and fairly (Any sales contracts with “assignment of contract of sale” may be a red flag).

2. Transactions with sales price greater than or equal to a 20% increase over seller’s acquisition cost are not allowed.

FHA extends “Anti-Flipping Waiver” to Help Stabilize the Kentucky Housing Market for FHA loans

Related articles

• What is the 90 Day Mortagage Flip Rule? (thephillypretzel.com)
• What is mimimum FHA downpayment for a Kentucky FHA Loan (kentuckyfhaloan.wordpress.com)
• How Does an Owner-Financed Property Work? (thinkup.waldenu.edu)