Fannie and Freddie set limits on short sale flipping

In what appears to be an effort to curb investors from taking advantage of distressed homeowners short selling their homes, Fannie Mae and Freddie Mac announced changes to their servicing requirements for short sales.

The most notable change is the addition of a deed restriction which prohibits the buyer of a short sale from selling the property for a period of 30 days and limits the buyer from selling the property for a sales price greater than 120% of the short sale price within 90 days.

This new guideline will undoubtedly effect investors and their view of short sales given that most look to flip properties fast and usually result in a higher asking price compared to the new guideline of 120% of the original sales price.

Investors able to overlook the 90 day waiting period will likely just take the extra hit in their carrying costs but continue their profit seeking ways.

What do you think? Is this good or bad for the housing market?

About Daniel Di Matteo

Realtor at CENTURY 21 Award, Daniel was Voted U-T San Diego’s Best Real Estate Agent in 2014. A Husband, Father, and most recently, accomplished Blog writer, which explains your visit today.