Financing a Flipped Property

Be aware that many lenders have newer guidelines restricting borrower financing eligibility on properties that have been 'Flipped'. A 'Flip' often happens when an investor purchases a home, rehabs it, and then puts it back on the market for profit. A 'Flip' is generally considered to be a property that has been recently acquired (in the past 12 months) by the seller and is being resold at a higher price.

The borrower may not learn of the lender restriction(s) until well into the transaction when the borrower has already committed funds for appraisals and home inspections, not to mention the time and effort for all affected parties in the transaction.

Buyers should instruct their Realtor to thoroughly examine the property ownership and sales price history. If the property has been 'Flipped', you (or your Realtor) will need to discuss with your lender prior to writing an offer whether or not you will still be eligible for financing on that property and if there are any additional financing restrictions (i.e. larger down payment, etc).

Remember, different lenders have different guidelines and restrictions. Be sure to check with other lenders if your primary lender cannot provide financing on a 'Flipped' property.

Happy House Hunting!