The Return of Seasoning for FHA?

Question

So I was supposed to close the sale of a property this morning when the buyers mortgage company suddenly wanted to know if the property was a "flip".  After biting my tongue to avoid the stream of profanities I wanted to unleash, I asked why.  According to the mortgage company FHA has resurrected the seasoning requirements for FHA mortgages. has anyone else experienced this of late?  Fortunately, this was a property I had under a lease option for a year and closed in January.  My guess is that it's just the mortgage company being a pain.

Todd Plambeck · Answer

Thanks Brian, that's some good info.  This will be the third FHA I've had on flips this year and the first time I've heard anything like this.

Brian Gibbons · Answer

http://portal.hud.gov/hudportal/documents/huddoc?i...

FHA INFO #14-73December 10, 2014NEWS AND UPDATES

TO:All FHA-Approved Mortgagees

What’s New

Expiration of the Federal Housing Administration’s Property Flipping Waiver

Today, the Federal Housing Administration’s (FHA) Office of Single Family Housing announced that the temporary waiver of FHA’s regulation that prohibits the use of FHA financing to purchase single family properties that are being resold within 90 days of the previous acquisition ,expires on December 31, 2014. The waiver applies to all sales contracts executed on or after February 1, 2010, until 11:59 PM, December 31, 2014.FHA deems a sales contract to be executed when all parties to the contract have signed the contract, and the contract is enforceable under the law of the state the property is located.Mortgages that are made on properties in which sales contracts have been executed after 11:59 PM, December 31, 2014, are not eligible for a waiver of the regulation prohibiting property flipping.FHA will not extend the waiver beyond December 31, 2014.Section 203.37a(c) lists the sales transactions exempt from this rule.The exempt transactions include sales by HUD of real estate-owned (REO) properties under HUD’s regulations in 24 CFR part 291, sales by other federal agencies of REO properties, sales of properties by nonprofit organizations that have been approved to purchase and resell HUD REO properties, sales by state - and federally - chartered financial institutions and government sponsored enterprises (GSEs), and, upon announcement by HUD through issuance of a notice, sales of properties in areas designated by the President as federal disaster areas.The regulation, including its exemptions, is still in effect.Quick Links and ResourcesReview the Federal Register Notice (Docket No. FR - 5397 - N - 05), “Federal Housing Administration (FHA): Temporary Waiver of FHA’s Regulation on Property Flipping; Extension of Waiver” , dated November 29, 2012 at http://www.gpo.gov/fdsys/pkg/FR-2012-11-29/pdf/201...View the Electronic Code of Federal Regulations at http://www.ecfr.gov/cgi-bin/text-idx?rgn=div8&node...Contact the FHA Resource Center:Visit our online knowledge base to obtain answers to frequently asked questions 24/7 at www.hud.gov/answers E-mail the FHA Resource Center at answers@hud.gov.Emails and phone messages will be responded to during normal hours of operation, 8:00 a.m. to 8:00 p.m., ET, Monday through Friday on all non- Federal holidays. Call l 800-CALLFHA (1-800-225-5342).

Stuart Birdsong · Answer

I have seen this play out several times over the last year. However, the seasoning period is 90 days following when the seller closed on the property. In addition, although, I may be wrong, I believe you can't accept an offer from an FHA buyer until the 90 days are up. It sounds like this shouldn't be a concern to you given the amount of time you have owned the home.

Cheers!

Stuart