FHA 2022 Guidelines On Buying House Flips

FHA 2022 Guidelines On Buying House Flips

FHA 2022 Guidelines On Buying House Flips: Introduction

If you have ever been interested in house flips and how the FHA treats them, this is the article as we will go over the FHA 2022 guidelines on buying house flips.  To start with the FHA guidelines on buying house flips requires a minimum of a 90-day waiting period for homeowners to be able to sell their home to a borrower who is only buying the home with an FHA Loan.  Before the large real estate and mortgage collapse of 2008 that kicked off the Great Recession, property flipping was extremely popular and very lucrative given the sky-rocketing property values that were taking place.

However, once 2008 property flipping came to an almost immediate halt and the backlash was full of people going through foreclosures, deeds in lieu of foreclosure, bankruptcies, and short sales.  When this came to a halt, it put a lot of construction workers out of a job because these “professional” house flippers employed huge crews who would remodel houses in 30 days or less and have multiple projects and properties going at once.

FHA 2022 Guidelines On Buying House Flips: These Days
FHA 2022 Guidelines On Buying House Flips: These Days

These days the FHA 2022 guidelines on buying house flips has changed the way a property can be bought and subsequently sold.  The FHA 2022 guidelines on buying house flips states that if an FHA buyer is looking to purchase a house flip, they must wait until the property is at least 90 days old with the current owner.  This really puts a damper on the possibility for getting into the property flipping industry because if you can get a house done within 30-45 days after purchase, you automatically know an FHA buyer can’t buy the home for 45-60 days.  You are essentially cutting off the most popular loan program in the United States because of a mandatory waiting period for FHA buyers.

FHA 2022 Guidelines On Buying House Flips: Impact On Investors

As mentioned earlier, before the Great Recession occurred in 2008, house flipping was a major career for a lot of people.  As you have always been taught since you were a child was that home values can only go up and a home is a sound investment.  No one could have ever seen this happening, and the market was so saturated with “professional” house flippers that once the market collapsed, most investor portfolios were destroyed and they saw most of their properties fall into foreclosure.  Now as the market has stabilized, there really isn’t a need for the 2022 FHA Guidelines On Buying House Flips, but this is the hand FHA has dealt us.

Conventional Flip Rule 2022

Conventional Flipping Rule

The conventional flip rule is a set of best practices for real estate investors that outlines when to buy and hold property, and when to sell it.

The conventional flip rule is a regulation that was put in place in order to prevent investors from taking advantage of homeowners who are facing foreclosure. This rule states that if an investor buys a property within 90 days of the foreclosure sale date, they will not be able to resell the property for at least six months. This rule was put in place to protect homeowners from being taken advantage of by investors who would purchase their home and then quickly turn around and sell it for a profit.

  • For properties purchased before December 31, 2020, you must own the property for at least five years before selling it.
  • For properties purchased after December 31, 2020, you must own the property for at least two years before selling it.

There are a few exceptions to the rule, but generally speaking, if you follow the conventional flip rule, you’ll be in good shape.

If you’re thinking about flipping a property, it’s important to be aware of the conventional flip rule and plan your exit strategy accordingly. If you’re looking to buy a property to hold as a long-term investment, you can rest assured knowing that you won’t have to worry about flipping it for a while. Of course, as with any investment, there are always risks involved.

The real estate market is constantly changing and there’s no telling what will happen in the future. However, if you diversify your portfolio and invest in a mix of properties – both short-term flips and long-term holds – you’ll be in a good position no matter what the market does.

 

There should not be a mandatory waiting period for FHA buyers who are looking to purchase a home especially with the increased requirements and underwriting procedures needed for homes these days.  Gone are the days of no-document or minimal document loans for people who had no right to purchase a home to begin with.  All I can say is the investors will feel this pinch when trying to sell their homes when a huge part of their potential buyers aren’t able to purchase the home.  If you are an FHA buyer who is looking to get a pre-approval for your next home loan, please give me a call or visit my website and we can work on getting you in the right position when the time is right.  Call me at 888-900-1020, email at contact@loanconsultants.org.

Leave a Reply

Your email address will not be published.