The U.S. Department of Housing and Urban Development (HUD) published a final rule in the Federal Register on June 7, 2006 amending previous regulations regarding property flipping. According to the new rule, only the owner of record may sell properties that will be financed using mortgages insured by the Federal Housing Administration (FHA). Also, property sold within 90 days of acquisition will not be eligible for FHA-insured financing.
There are exemptions from the rule, which include sales of properties by HUD, Fannie Mae and Freddie Mac, state and local government agencies, HUD-approved nonprofits, and sales of properties within presidentially declared disaster areas. The rule takes effect for mortgages endorsed for insurance on or after July 7, 2006. Read the mortgagee letter available through the HUD web site at http://www.hudclips.org/sub_nonhud/cgi/nph-brs.cgi? d=MLET&s1=06-$[no] &op1=AND&SECT1=TXTHLB&SECT5=MLET&u=./ hudclips.cgi&p=1&r=3&f=G for more information.