You probably are aware that last week FHA extended its waiver of the property flip rule, eliminating the “seasoning” requirement for sellers. You may not be aware that some lenders also have reduced the seasoning period for conventional loans to as little as 30 days.
As we said before, this is a huge deal for property investors because it means they can purchase a foreclosure at auction and almost immediately market the property for sale at an elevated price.
The FHA property flip rule prohibited the use of FHA financing for properties that had been owned for less than 90 days. The FHA announcement last week extended the waiver through the end of 2011. Most lenders now are applying the FHA waiver as intended, meaning the waiver applies even to properties for sale by individuals and corporations.
For conventional loans, the seller must be on title for 30 days prior to signing the contract for sale. The rule applies to all sellers, including individuals or corporations.