| FHA has prohibited insuring a Florida home mortgage | | | | the subject property can be found on the appraisal |
| on a home owned by the seller for less than 90 days. | | | | report)d. The property was marketed openly and fairly, |
| This restriction was imposed in 2003 to prevent | | | | via MLS, auction, For Sale by Owner offering, or |
| property flipping. On January 15, 2010, HUD announced | | | | developer marketing (any sales contracts with an |
| a temporary (1 year) waiver of the prohibition with | | | | "assignment of contract of sale", which represents a |
| strict conditions to insure against predatory practices. | | | | special arrangement between seller and buyer may be |
| Effective with Florida Home Mortgages underwritten | | | | a red flag). |
| on or after April 1, 2010, Most lenders will allow the 90 | | | | 2. Transactions with sales price greater than or equal |
| day waiver for all property sellers, including private sale | | | | to a 20% increase over seller's acquisition cost, are not |
| transactions, but prohibits FHA financing for properties | | | | allowed. |
| owned less than 90 days if the sales price is greater | | | | There are several reasons you might be interested in |
| than or equal to a 20% increase over the seller's | | | | paying special attention to this guideline. |
| acquisition cost. | | | | #1. If you're a first time home buyer and have gotten |
| The 90 days is calculated from the seller's acquisition | | | | your contract in on time to qualify for the tax credit, it's |
| date to the purchase contract date of the new | | | | also important that you close on time as well. If the |
| transaction.Regardless of who the property seller is, if | | | | requirements stated above are not met. You can rest |
| the resale occurs within 0 to 90 days, the following | | | | assure closing on your loan will be extremely difficult if |
| requirements must be met: | | | | even possible. |
| 1. All transactions must be arms length, with no identity | | | | #2. Realtors before you invest your energy, time and |
| of interest between buyer and seller or other parties | | | | money you want to make sure you know if the seller |
| participating in the sales transactions. Specific ways to | | | | is an investor group as well as all of the specific details |
| ensure an armslength transaction include:a. Property | | | | pertaining to the property. Some times this information |
| seller currently holds title to the property.b. LLCs, | | | | is not posted in the public records if the sale is recent. |
| corporations, or trusts, serving as sellers must meet all | | | | #3. Real Estate investors you want to make sure you |
| applicable state and Federal law.c. No pattern of | | | | can sell your investment property as smoothly as |
| previous flipping activity exists on the subject property, | | | | possible. Providing this information to all parties involved |
| as evidenced by multiple title transfers within a 12 | | | | will help you see a faster return on your investment. |
| month period time frame (chain of title information for | | | | |