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“Flipped” Properties Are OK; 5% Down for FHA Not Required, But Sometimes Requested

We still get questions about “Flipped” properties, or properties that were purchased by investors less than 90 days ago. We have numerous lenders (both FHA and Conventional) that have NO issues with flipped properties, irrespective of whether or not the current buyer is a potential occupant or an investor.

If, however, the price has increased by over 20% in the last 90 days, the price increase will have to be justified with an extra appraisal and an explanation regarding improvements to the property.

FHA has NOT announced an increase in the required down payment percentage. Down payments remain at 3.5%. We sometimes ask for 5% down payments, however, because our automated underwriter (DU) provides more flexible approvals with a slightly larger down payment.

Jay Voorhees
Founder/Broker | JVM Lending
(855) 855-4491 | DRE# 1197176, NMLS# 310167