If the home you are buying is being flipped within 90 to 180 days since the purchase and has experienced an
increase in value, there are some things you need to know.
A New Appraisal is Required When:
- The borrower is purchasing a property that was purchased by the seller less than six months before the
borrower signs the purchase contract, or - There is a value increase (as represented by the new sales price) of 10% or more if the seller bought the
home within the past 90 days, or - There is a value increase (as represented by the new sales price) of 20% or more if the seller bought the
home within the past 91-180 days
Exemptions for this rule are:
- If the property is in a rural area
- When purchasing from a local, State, or Federal Government Agency
- When the seller acquired the title to the property through foreclosure, deed-in-lieu of foreclosure
- When purchasing from a non-profit entity that is part of a local, State, or Federal Government program
- When the seller acquired the property through inheritance or dissolution of marriage
- When purchasing from an employer or relocation agency in connection with the relocation of an employee
- When purchasing from a service member who received deployment or permanent change of station orders
- Located in an area that the President designated as a federally declared disaster area based on specific
parameters - Loans for the initial construction of a dwelling
- Temporary Bridge Loans (for 12 months or less)
- Loans secured by a new manufactured home
Additional Requirements
You should be aware of some additional requirements because it may take longer to process the loans due to the
possibility of a 2nd appraisal.
