A waiver by the Federal Housing Administration on an anti-flipping rule has been extended.
Last May, the U.S. Department of Housing and Urban Development said it would waive its restriction against financing properties that were acquired within the prior 90 days. The waiver was effective until next Tuesday.
At the time, HUD said it was trying to stimulate investor purchases.
In a statement Friday, FHA Commissioner H. Stevens said the exemption was a success.
“Today I can report that this policy change has been effective,” Stevens said in the statement. “Since the original waiver went into effect on last February, FHA has insured more than 21,000 mortgages worth over $3.6 billion on properties resold within 90 days of acquisition.”
The news release cited research findings that it often takes less than 90 days to acquire, rehabilitate and resell properties in today’s market — and the anti-flipping restriction deters investors from buying properties.
Today’s statement indicated that the waiver would be extended until Dec. 31 of this year.
With today’s move, HUD hopes to “accelerate the resale of foreclosed upon homes in neighborhoods struggling to overcome possible property abandonment and blight.”
HUD reminded mortgagees that sellers and buyers must have no “identity of interest” on FHA transactions.
Loans on properties where the price is more than 20 percent above what the seller paid can only be closed at qualified lenders.
The waiver does not apply to home-equity conversion mortgages.
