We still see the occasional “Flip” surface, although not nearly as often as we saw them in 2010-2012.
A “Flip” once again is a property that is purchased (usually by investors) and re-sold within 90 days.
FHA will not finance Flips at all.
Conventional and Jumbo lenders will finance Flips, but they require two appraisals. Many lenders (including FHA lenders) require two appraisals even when a property is flipped within 180 days (even when outside of formal flip guidelines).
This is where much confusion lies: Lenders evaluate Flips by “contract date” and NOT close of escrow date. Hence, if an investor buys a property today on April 20th, and he wants to avoid Flip issues, he will not be able to enter into a contract to sell the property until after July 20th. If he enters into a contract to sell the property in June, it will be a Flip even if COE is in September.
Founder/Broker | JVM Lending
(855) 855-4491 | DRE# 01524255, NMLS# 335646