Since 2003, Meridian Idaho Homes flippers have been restricted from selling to buyers using FHA (Federal Housing Administration) loans for 90 days after purchasing the property. That meant some Meridian Idaho Homes flippers would shy away from deals with potential FHA buyers, knowing they’d have to wait for that 90-day period to end.

A new market will soon open to those individuals who want to buy the low cost Meridian and Eagle, Idaho Homes with the purpose of fixing them up and selling them!!  There is plenty of inventory of Meridian, ID foreclosures in disrepair and repairing them could be made easier!!

There will be new rules in place to prevent predatory practices. First of all, deals must be “arms-length:” The parties in the sale can’t have the same interest.

This is designed in part to prevent homeowners from defaulting on a loan, then bringing in a friend to buy it from the bank at a rock-bottom price and return it to the homeowner at a slightly higher-than-rock-bottom price. In that scenario, the friend/flipper would make a profit and the homeowner would have a cheaper mortgage, all at the lender’s expense.

Another notable restriction prevents sellers from knocking the new price up more than 20 percent from its purchase price, unless an independent appraiser says the renovations justify that increase.

As long as you are renovating and selling houses is a “legitimate business activity, as long as they’re not turning around and making a substantial profit after beating up the bank for a low price.”

And since FHA loans have come to play an ever-more-important role in homebuying in the last two years, being allowed to sell to FHA buyers makes house flipping a lot more attractive.