HUD announces one year waiver on 90 Day Rule

Mortgage and Lending with Veritas Funding, SLC, UT NMLS #231319

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  regarding those requirements.


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 for more info or call me directly at 801.983.8211 to discuss.

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Comments (5)

Chris Ann Cleland
Long and Foster Real Estate - Gainesville, VA
Associate Broker, Bristow, VA

Joe:  I'm glad they are lifting the rule.  Will things a lot easier as we sell our way out of this market.  Waiting to buy a house because an investor got it first is silly.

Jan 18, 2010 10:11 AM
Indera Coggins
Re/Max 100 - Dunkirk, MD

Joe, how soon can you write an offer on a rehabbed home prior to 90 days. That's good news. Thanks.

Jan 18, 2010 10:14 AM
Jennifer Grace
Elk Grove, CA
Jennifer Grace

This is life altering for so many investors!

Jan 18, 2010 10:15 AM
Joe Libin
Veritas Funding, SLC, UT - Salt Lake City, UT
Veritas Funding NMLS #843779 & #252108

Indera - After Feb 1st, you can write an offer the next day.  For example, investor buys home at auction on Tuesday, vesting is recorded into investors name on Wednesday, client writes offer on Thursday.  If I was doing the loan, you'd close two weeks later :-) 

Jan 18, 2010 10:25 AM
Randy DeLaMare
Realtypath LLC - Salt Lake City, UT
Helping friends Realize their Real Estate Dreams


Good information. I haven't had recent troubles because of this as far as I know but it sure helps to keep up to date with the rules. If we don't stay vigilant in education we could find ourselves in a lot of hot water. Thanks for the post!

Jan 20, 2010 02:14 AM