FHA - 2 transfers in a 12 month period?

2 Replies

We don't typically buy from wholesalers, but we found a good deal that a wholesaler has under contract. It's an REO, so we will need to double close. Our intention is to renovate the property and resell within the next few months. My question is, since title will change hands from him to us, then to our end buyer, will we have a problem reselling due to multiple title changes in a short period of time?

I tried researching on threads here to find the answer, but could only find a thread from back in 2011, so I'd imagine the rules may have changed since then.

There's a good chance our end buyer could be using FHA financing.

Assigning the contract isn't an option and neither is having the wholesaler buy it in an LLC then is buying the LLC.

One idea that I did think of, IF the multiple title transfers is going to be an issue, is to go ahead and double close but buy from the wholesaler to us into a land trust. Then maybe it would appear that it was just a transfer into a trust for asset protection or tax reasons (by the wholesaler), especially since banks won't let you take title into a land trust. Thoughts?

The land trust won't be ignored. Multiple sales within 12 months will be reviewed. No resale from your within90 days.

"reviewed" is a bit vague :) Do you know if there's any language in the guidelines which says multiple transfers within 12 months will disqualify it from FHA funding? I read in one thread here, from 4 years ago, that multiple transfers will require a 2nd appraisal at sellers expense, but then there were other people who stated it disqualifies the sale entirely.

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