The following conditions apply in order for a “flipped” home to qualify for FHA insured financing:

• All transactions must be arms-length with no inappropriate agreements
  • Seller must hold title
  • No previous flipping activity on the property
  • Property must have been marketed openly and fairly via MLS, etc
• When sales price exceeds sellers acquisition cost by more than 20%:
  • Value increase must be documented through rehab costs or explanation by appraiser.
  • Lender must order a property inspection report and provide to buyer prior to closing.  Inspection must cover:
    • Structure – foundation, floor, ceiling, walls, roof
    • Exterior – siding, doors, windows, walkways, driveways
    • Plumbing, electrical, heating and air conditioning systems
    • Interiors
    • Insulation and ventilation
    • Fireplaces and solid fuel-burning appliances