90-Day ‘No Flip' Rule Coming Back

According to real estate writer Kenneth Harney, the Federal Housing Administration (FHA) plans to reintroduce a rule it put on hiatus during the national housing recovery. After December 31, investors will once again have to own a property for at least 90 days before reselling it at a higher price if they use agency financing.

The government waived the 90-day mandatory ownership period in 2010, and FHA estimates that about 102,000 properties were renovated and resold under the waiver. The 90-day rule was designed to protect consumers from con artists who flipped homes at hyper-inflated prices after completing only surface repairs and doing shoddy construction. However, those same rehab investors will have to ask more money for the homes they renovate as the selling prices of the end product—rehabbed houses for moderate-income buyers—are almost certain to be higher.