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#316716 - 12/08/09 06:24 PM Is the 90 day flip rule now extended to Conventional loans?
socalreman Offline
Veteran Member

Registered: 05/13/08
Posts: 757
Loc: Orange County, CA
Anyone? Trying to set up a sale with an Investor who will go to the trustee sale at the court steps and purchase a home for a friend then turn around and sell it for an extra $30K with the new Buyer using a 25% down conventional loan and to close in 30 days. Is the 90 day flip rule in affect for conventional loans too? If so, flipping is going to get more difficult.
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#316718 - 12/08/09 06:38 PM Re: Is the 90 day flip rule now extended to Conventional loans? [Re: socalreman]
Grampa Offline
Major Contributor

Registered: 06/30/09
Posts: 2271
Loc: Margaritaville
If I recall correctly FHA will not insure the flip. That is where the issue is as FHA insures over 5 million home loans at this time. Many banks will not loan if FHA will not insure. Some will but, it will usually cost you in interest rate.

As far as I know there is no legal restraint for lenders loaning on a flip but, FHA is very clear that they won't insure.

I am sure others here are more knowedgeable on the subject but that is the Readers Digest version.

Good Luck
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#316735 - 12/08/09 08:13 PM Re: Is the 90 day flip rule now extended to Conventional loans? [Re: Grampa]
wij304 Offline
Member

Registered: 08/02/07
Posts: 223
Loc: Iowa
There is a 90 day waiting period after purchase before FHA will finance a new sale.You need to check with the buyer's lender on conventional.I had this issue come up on a remodeled property(it was over 6 months)where the lender wanted a list of improvements and costs that the seller had put in to the property. Since the seller had done many improvements and upgades there was no problem.If nothing is being done to the property you could have a problem.

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#316738 - 12/08/09 08:37 PM Re: Is the 90 day flip rule now extended to Conventional loans? [Re: wij304]
socalreman Offline
Veteran Member

Registered: 05/13/08
Posts: 757
Loc: Orange County, CA
Ok so I spoke to the big three majors, Chase, BOFA, and Wells Fargo all say that they do have a 90 FLIP Rule in place and that they are not lending on any properties unless it's a VA loan and with that they would have to have 2 appraisals. Ladies and Gentleman, with regards to the biggies, there is NO MORE FLIPPING unless you wait 90 days.
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Coffee is for closers!

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#316751 - 12/08/09 09:03 PM Re: Is the 90 day flip rule now extended to Conventional loans? [Re: socalreman]
PA Roadkill Offline
Major Contributor

Registered: 11/15/06
Posts: 2167
Loc: The Middle of the Interstate
Also, the Fannie addendum has a 90 day flip rule for non owner-occupant purchasers IF the sale price is more than 20% over the purchase price. That also applies to new "encumberances". It runs from the deed date, not the offer date.
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#316781 - 12/08/09 11:11 PM Re: Is the 90 day flip rule now extended to Conventional loans? [Re: PA Roadkill]
P-Town Offline
Member

Registered: 12/15/08
Posts: 328
Loc: Northern Ca
Try a loan broker or a local bank. I have closed a couple flip properties recently. You can get a conventional loan without waiting 90 days.

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#316787 - 12/09/09 12:11 AM Re: Is the 90 day flip rule now extended to Conventional loans? [Re: P-Town]
Barbara Dow Offline
Member

Registered: 07/16/09
Posts: 90
Loc: Northern California
I have a seller doing a flip, under 90 days. I found a mortgage broker who has several lenders that will do 90 LTV. Problem is, all the interested buyers, so far, need to go FHA, they do not have the 10% down payment. So, we will most likely have to wait the 90 days anyway.

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