Industry News

HUD releases new anti-flipping rules

Homes sold within 90 days of purchase ineligible for funding

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Only the actual owner of a home can sell that home with Federal Housing Administration financing, and in an attempt to discourage flipping, homes sold within 90 days of purchase won't be eligible for FHA financing, the U.S. Department of Housing and Urban Development ruled Wednesday. The rules provide that property acquired by the seller is not eligible for the buyer to obtain an FHA-insured mortgage unless the seller has owned that property for at least 90 days. The seller must also be the owner of record. HUD published the final rule Wednesday tightening regulations against property flipping in its mortgage insurance programs. The rule goes into effect July 9, the agency said. In general, "flipping" refers simply to reselling a property very soon after it is purchased, but all too often, property flips involve mortgage fraud or predatory lending practices. HUD's regulations focus on flipping involving property resold a short period of time after it is purchased by the seller for a ...