HUD Issues Anti-Flipping Exceptions

The Department of Housing and Urban Development has issued an interim rule that allows exceptions to its anti-flipping rule in cases where the seller has inherited the property or the seller is a federal agency.The interim rule "clarifies that the time restrictions on sales do not apply to properties that are acquired by inheritance," HUD said. However, HUD rejected a request by lenders and builders for an exception from the anti-flipping rule so that they could use FHA financing to sell properties quickly. As a preventive measure, the Federal Housing Administration does not insure loans unless the seller has owned a one- to four-family property for at least three months. HUD also decided to drop the three-month restriction in cases where federal agencies are selling foreclosed properties. The interim rule goes into effect Jan. 24. HUD is soliciting suggestions for additional exceptions that are consistent with its objective of preventing property-flipping. The comment period ends Feb. 22