Re: Clarification-HUD and Flipping - Posted by jasonrei
Posted by jasonrei on October 10, 2003 at 10:08:26:
No law, but there are guidelines FHA lenders must follow. You can “flip” a house you own, or one you just control. I only flip houses I own. I buy, fix up, and sell.
Many conventional lenders will not loan on a house where the current owner has held title for less than 12 months. I used to prefer selling to FHA buyers for this reason. Right before the summer, HUD changed their guidelines- http://edocket.access.gpo.gov/2003/pdf/03-10778.pdf
Since then I found a good conventional lender that doesn’t care how long I’ve owned my houses, so I steer my buyers to that lender. I did buy a house in mid-May that I fixed up. Got an FHA offer in late July. I told the lender that I’d bought the house just 2 to 2 1/2 mos earlier for about half of what I was selling it for. I provided the lender cancelled checks and job invoice for repairs. Provided appraiser with before/after pix and a list of improvements.
$20k documented repairs
Lender asked me to pay for another appraisal (the appraisal had a name but I forget what, it had something to do with supporting or justifying the 1st appraisal). Anyway, both were satisfactory. Closed on the sale about 3 1/2 months after my purchase deed had been recorded.
Had a nice offer recently for a house I bought in July and fixed up. Offer was VA. Countrywide said “no” because I hadn’t held title long enough. I’m pretty much fed up with FHA/VA now.