If you want to flip a house, we have good news! Apparently, the FHA has said that house flippers can play throughout 2012. So, if you want to buy a house and sell it for a profit rather than move in, you’re in luck!
Even though you may have heard the term ‘house flipping’ before, do you know what it actually means? In real estate, house flippers are people who buy homes on the cheap and then quickly sell them for a profit. If you do it right, it can be a great way to make some money on the side. In fact, some people have made millions flipping houses – but you have to know what you’re doing in order to enjoy any kind of success.
However, let’s get back to the issue at hand. The FHA, otherwise known as the Federal Housing Administration, has given house flippers a little reprieve for this year. In an effort to stabilize housing prices and get the market back on track, the FHA has extended its waiver of anti-flipping rules and regulations throughout this year.
Initially issued back in 2010, the FHA’s waiver was originally going to expire this month. The waiver actually suspends the rules and regulations that prohibit the FHA from insuring mortgages for homes that are bought and sold within the same 90-day period. Flipping usually happens within that range.
Experts believe that the extension will help accelerate the housing market and get people moving into new homes again. We sure hope they’re right! When the housing market takes a hit, many other industries do the same, including the moving and storage sector.
The FHA also believes that this extension will help reduce the number of foreclosures we are seeing across the nation. When we see fewer foreclosures, we also see better house prices and a boom in the economy. So, let’s keep our fingers crossed! No one likes to be forced to relocate, but foreclosures also bring the home values down for their neighbors.
Remember, the FHA does not actually issue the mortgages: it just insures them. However, the agency is a main player in the mortgage industry and influences lending in lower-income areas. In fact, many low-income mortgages wouldn’t even be backed without the FHA insurance and backing.
If experts believe that this waiver extension will boost the market, why did they even implement the rules it suspends in the first place? Basically, the regulations act as protection for the consumer against predatory flipping. Yes, there are predators even in real estate!
Since 2010, when the waiver went into place, the FHA actually insured over 42,000 loans to buy homes that were going to be resold within 90 days. That’s about $7 billion. Hopefully, we’ll see a lot more people moving into new homes in the near future.