The Department of Housing and Urban Development (HUD) announced on Friday, Jan. 15th that it will eliminate for one year the Federal Housing Administration (FHA) 90-day flipping rule.

FHA’s anti-flipping rule generally prohibits insuring a mortgage on a home owned by the seller for less than 90 days. That rule has already been waived for certain transactions, including REO’s. Now, beginning Feb. 1st, buyers may use FHA-insured financing to purchase properties resold through private developers and investors.  This one-year waiver will give FHA buyers access to a much broader array of recently foreclosed properties that have been renovated and are now being resold.

Under the temporary waiver, all transactions must be made at arms length and may require additional documentation of improvements and justification of certain price increases. Additional documentation may include a second appraisal and a property inispection ordered by the lender.

This entry was posted on Thursday, January 21st, 2010 at 5:29 am and is filed under FHA Loans. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.