FHA – Flipping Rule Waiver If Value Increased More Than 20%

February 27, 2010 by · 1 Comment 

For property sales prices that are 20% or more above the Seller’s acquisition cost the following must be performed:  Keep in mind that if the value increases by 100% or more, a second appraisal is required:

  • Appraiser must indicate the Seller completed legitimate renovation, repair and rehabilitation work on the subject property to substantiate the increase in value. 
  • If the work was not performed, Appraiser must provide appropriate explanation of the increase in value since prior title transfer;


  • The Lender processing the loan must order a property inspection report and provide a copy to the purchaser prior to closing. Cost of this inspection may be charged to the Borrower.  The inspector must not have any interest in the property or relationship with the Seller and may only be compensated by the Lender.  The inspector may not compensate any one for the inspection referral or be compensated for making referrals or recommending contractors to perform any repairs recommended by the inspection.  Property inspections must include, at a minimum, the following:
  • Structure, including foundation, floor, ceiling, walls and roof;
  • Exterior, including siding, doors, windows, appurtenant structures such as decks and balconies, walkways and driveways;
  • Plumbing, electrical and heating and cooling systems;
  • All interiors, all insulation and ventilation systems, as well as fireplaces and solid-fuel-burning appliances. 

None of the current changes has stopped Mid Florida Investment Properties from buying properties, rehabbing and  selling for more than the 20% acquisition price. It will be business as usual. We have always liked the ugly houses and those will be the homes that are easier to substantiate the increase in value.

About Mike

Mid Florida Investment Properties, LLC owner Mike Calvert has been buying and selling real estate in Central Florida for over 18 years. Get a seasoned investor as your partner for a fraction of the profit. We handle the transaction from start to finish!


One Response to “FHA – Flipping Rule Waiver If Value Increased More Than 20%”
  1. Jane says:

    I am very interested in buying wholesale, remodeling, and flipping.  I need an honest and knowledgeable person on the ground(I live in CT) to remodel in proportion to the purchase price  ARV .  I also need to organiz the financing somehow.  I have about 30K cash at my disposal but have not yet made the leap of faith that I will get my $ back in reasonable time.  Selling low to the end buyer is ok as long as I make at least 20k within two months.  Am I dreaming?  Can you help me get started?

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