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FHA Extends Waiver of Arizona Investment Property Anti-Flipping Regulations through 2012

In an effort to continue stabilizing home values and improve conditions in Arizona communities experiencing high foreclosure activity, the Federal Housing Administration (FHA) will extend FHA’s temporary waiver of the anti-flipping regulations. Meaning Arizona Investors who have purchased an investment property needing repair can turn around and re-sell the property upon completion (rehab) even if title seasoning is less than 90 days. *Restrictions and regulations apply

With certain exceptions, FHA regulations prohibit insuring a mortgage on a home owned by the seller for less than 90 days. In 2010, FHA temporarily waived this regulation through January 31, 2011, and later extended that waiver through the remainder of 2011. The new extension will permit Arizona Homes to be resold to Owner Occupant buyers using FHA-insured financing. This law stands true to purchase HUD-owned properties, Phoenix bank owned properties, or properties resold through private sales. It will allow homes to resell as quickly as possible, helping to stabilize Arizona Real Estate prices and to revitalize neighborhoods and communities.

The extension is effective through December 31, 2012, unless otherwise extended or withdrawn by FHA. All other terms of the existing Waiver will remain the same. The Waiver contains strict conditions and guidelines to prevent the predatory practice of property flipping, in which properties are quickly resold at inflated prices to owner occupant borrowers. The Waiver continues to be limited to sales meeting the following 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 Real Estate property is 20 percent or more above the seller’s acquisition cost, the Waiver will only apply if the lender meets specific conditions and documents the justification for the increase in value:

Documents and restrictions for Arizona Investors reselling property include but are not limited to:

· Receipts and documentation to prove increase of value in a short period of time (usually for 20% increase or greater)

· 2 appraisals conducted by licensed Arizona appraiser one paid by buyer and one paid by the Investor (lender takes the lower of the two)