Property flipping is not the actual flipping of a house…. It is by definition a quick sale of a property for profit. These houses are usually ones that need renovations so they are sold for cheaper to the investor. These investors usually can do the renovations needed and then sale to a buyer for a profit. Unfortunately most of these homes are usually the ones in foreclosure.
Foreclosure: A legal process by which the lender forces a sale of a mortgaged property because the borrower has not met the terms of the mortgage.
There were many Investors taking advantage of this situation. They were fixing the minimum repairs needed to make a sale which made the Department of Housing and Urban Development (HUD) step in. In 2001 HUD saw what was happening and created a new guideline. There was now going to be a time limit the investor had to hold onto the property in order for the new borrower to obtain an FHA loan. During those times there were thousand of products out there to choose from, home values were appreciating and credit scores were higher.
HUD saw the need for a temporary change so Secretary Shaun Donovan announced that they were suspending the 90 day flipping rule. They were setting a temporary waiver in place that was good for one year. This waiver would allow the quick resale of foreclosed homes where the activity is high. I read thought the guidelines and believe you should too. This waiver will help tons of people but it does have very strict conditions and guidelines to ensure that there are no predatory practices. Take a look at the HUD website for more details of this policy and to view the actual waiver requirements. (http://www.hud.gov/) http://reitips.com/fha-property-flipping-waiver/ ( check out this great video)
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