Most folks know that FHA requires 91 days to pass before a contract can be written on a property that has changed ownership in order for the buyer to qualify for an FHA loan. This is called the "90 Day Rule" and is designed to "protect FHA borrowers against predatory practices of ‘flipping' where properties are quickly resold at inflated prices to unsuspecting borrowers" for a quick profit.
On Friday, January 15th, HUD announced a one year "waiver" taking effect on Monday, February 1st lifting the 90 Day Rule under (most) circumstance. Read in full here http://www.hud.gov/offices/hsg/sfh/waivpropflip2010.pdf regarding those requirements.
WHAT THIS MEANS TO YOU!
Clients can now write an offer on a rehabbed home before the end of the 90 days. For example, I have an investor that buys bank owned property (typically hammered), fixes it up nicely and then lists it for sale within one month's time. Previously, he'd have to wait until the 91st day after original vesting before accepting an offer. During months two and three, the house remained repaired yet vacant with buyers ready, willing and able yet not eligible for FHA financing until now. Kudos to HUD and Secretary Donovan for listening and fixing the problem, we appreciate your help. Please visit my website at www.utahloanplan.com for more info or call me directly at 801.983.8211 to discuss.
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