FHA Extends Anti-Flipping Rule Exception
With certain exceptions, FHA regulations prohibit insuring a mortgage on a home owned by the seller for less than 90 days. Early last year, FHA temporarily waived this regulation through January 31, 2011. FHA posted a notice this week extending this waiver through the remainder of 2011. This action will permit buyers to continue to use FHA-insured financing to purchase HUD-owned properties, bank-owned properties, or properties resold through private sales. It will allow homes to resell as quickly as possible, helping to stabilize real estate prices and torevitalize neighborhoods and communities."
There are some exceptions and limitations. Read the document at http://www.hud.gov/offices/hsg/sfh/currentwaiver.pdf
This is good news for INVESTORS/REHABBERS looking to purchase foreclosed homes in need of work with the objective of a short-term "fix-n-flip". It will also stimulate buyers who may find rehabbed homes at reasonable prices in "move-in" condition, instead of the "handyman specials" REO homes that are not selling.