We know how popular FHA financing is because of the benefit of a much smaller down payment in buying a home.

Most realtors have had heard of the FHA “anti flipping rule” or maybe you know it as “seasoning” – Simply put – If a buyer was hoping to puchase a home that was purchased less than 90 days ago by a flipper and remodeled for resale, they would not be able to purchase it using an FHA Insured Mortgage.  This was a major stumblinjg block for buyers who ran into this scenario.  But also it was a stumbling block to get contractors to buy – repair and fix up. 

What we do know about contractors that flip homes is that they want to get in and get out as quickly as possible and not hold on to the property any longer than is necessary – They often finish  up a home in 30 to 45 days and want to sell it asap – In 2011 – there was a temporary waiver of the anti flipping rule to make it easier for contractors to buy and sell. - I believe the thinking was that flippers could IMPROVE the real estate landscape out there by buying and selling updated homes in less than 90 days and move some of the inventory out there that would simply sit idle without their help.

The real question is – what happens with this rule in 2012 – GOOD NEWS came out last week – In 2012 the Federal Housing Administration is extending the temporary waiver of its “anti-flipping” rule. So homebuyers relying on FHA financing will continue to be able to buy homes that have been flipped within the 90 day time frame. To read more about this waiver, click here.

Some additional guidelines for flippers include that you can only resell a property for a 20% or less elevated price from which you bought it. Of course with all the expenses of the flip, including attorney fees, realtor fees, and expense of the upgrades, a 20% profit is a good one!

This is good news for the 2012 market and important for realtors to be aware of – whether it’s to help buyers buy a flip or for your contractors who have considered flips.