It’s getting harder for some residential property investors to “give a flip” these days about good deals, thanks to stricter lending rules on homes that are bought and quickly resold.
In mid 2003, the Federal Housing Administration (FHA) tightened restrictions on re-sales occurring within 180 days and stopped insuring mortgages altogether on property sold more than once in 90 days. Since then, other lenders have followed suit, toughening underwriting standards for “quick-turns,” more commonly known as “flips.”
Many investors say the move was an overreaction and is clogging up the re-sale pipeline, unfairly impacting small entrepreneurs who can’t afford to tie up their assets for months at a time, and giving homeowners who need to exit their homes quickly a smaller universe of potential buyers.
Many investors say the move was an overreaction and is clogging up the re-sale pipeline, unfairly impacting small entrepreneurs who can’t afford to tie up their assets for months at a time, and giving homeowners who need to exit their homes quickly a smaller universe of potential buyers.
See the full article at Bankrate.com (http://www.bankrate.com/brm/news/real-estate/REguide/no-flippers1.asp)
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