[Begin excerpt]
The waiver will take effect on February 1, 2010 and is effective for one year, unless otherwise extended or withdrawn by the FHA Commissioner. To protect FHA borrowers against predatory practices of "flipping" where properties are quickly resold at inflated prices to unsuspecting borrowers, this waiver is limited to those sales meeting the following general conditions:
•All transactions must be arms-length, with no identity of interest between the buyer and seller or other parties participating in the sales transaction.
•In cases in which the sales price of the property is 20 percent or more above the seller's acquisition cost, the waiver will only apply if the lender meets specific conditions.
•The waiver is limited to forward mortgages, and does not apply to the Home
Equity Conversion Mortgage (HECM) for purchase program.
[End excerpt]
The press release and actual HUD "flip waiver" can be read at:
One caveat to those who use 24-hour transactional lenders to fund their deals is that same-day double closings are still not allowed since the property must be sold by the "seller of record", which means that there is not enough time with a same-day double closing to have the investor be the "seller of record" when this is checked. More likely, a double closing will take about a week to execute to allow for the investor to become the "seller of record".
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