Anti-flipping rules attempt to slow the home buying process down in order to prevent fraud.
In the aftermath of the real estate melt-down, FHA imposed “anti-flipping” rules. These rules were designed to slow the buy-then-sell process down and help catch or prevent fraud.
Basically, if you wanted to buy a home using FHA financing, the seller of that home would have to own it for a minimum of 90 days before you could make an offer on it. FHA then loosened those guidelines so that if the seller of a property were a bank (i.e. foreclosure), the anti-flipping rule would be waived. In February2010, in an attempt to help move excess inventory off the real estate market, FHA put a temporary suspension on the anti-flipping rule. Essentially, someone could buy a home one day, then turn around and sell it the next day, even if the buyer was using FHA financing.
Not much has been said about “anti-flipping” in the conventional lending world. Fannie Mae and Freddie Mac have never imposed a 90-day waiting period to avoid flipping. However, many buyers are surprised to find out that some lenders and, more importantly, many mortgage insurance companies have often set their own rules.
