Maureen Anders as seen in the "Ask the Legal Professionals" section of the Phoenix Business Journal

Q: Did the FHA change its anti-flipping policy prohibiting FHA-backed mortgages on properties sold within 90 days or less following a seller's acquisition of the property? 

A: Yes.  Effective February 1, 2010, the FHA adopted a temporary one-year policy that waived 24 CFR §203.37a(b)(2) in an effort to expand access to FHA mortgage insurance and allow for quick resales of foreclosed properties.  To protect FHA borrowers against some of the more predatory flipping practices, the temporary waiver is limited to those sales that satisfy the following conditions:  (i) the sales are arms-length, with no identity of interest between buyer and seller or other parties, (ii) if the sales price is 20% or more above seller's acquisition cost, the waiver only applies if the lender meets specific conditions, and (iii) the mortgage is a forward mortgage.  The waiver does not apply to the Home Equity Conversion Mortgage for purchase program.