FHA Wavies 90 Days Seasoning For One Year

January 25, 2010

Loans & Mortgages

0 IMG_3566FHA 90-Day Anti-Flipping Rule Waived For One Year – In an effort to stimulate home sales, HUD has announced that as of February 1st it will suspend its 90-day anti-flipping rule. This should have the effect of making FHA loans more easy to obtain for recently refurbished homes.

With certain exceptions, says HUD, “the FHA currently prohibits insuring a mortgage on a home owned by the seller for less than 90 days. This temporary waiver will give FHA borrowers access to a broader array of recently foreclosed properties.”

For one year, the Federal Housing Administration (FHA) will insure foreclosed properties marketed and sold by property disposition firms on behalf of lenders. The properties, which must purchased by owner-occupants, will no longer be subject to the customary 90-day waiting period.

“A glut of foreclosed and abandoned homes harms neighborhoods, frustrates homebuyers and delays a community’s recovery,” said Brian D. Montgomery, Assistant Secretary of Housing-Federal Housing Commissioner. “The action we take today will allow homebuyers to purchase these homes in much greater numbers and ease the excess supply of unsold homes in neighborhoods across the country.”

FHA’s new temporary policy will help stabilize neighborhoods experiencing high rates of foreclosure by reducing the inventory of unsold properties. Many foreclosed properties remain vacant for months, inviting vandalism and reducing values of surrounding homes. To address that sizeable inventory, lenders have hired companies that specialize in the marketing and disposition of foreclosed homes. It’s reasonable and appropriate that these firms have the ability to sell the properties to borrowers using FHA financing.

With certain exceptions, FHA currently prohibits insuring a mortgage on a home owned by the seller for less than 90 days. This prohibition is intended to prevent property “flipping,” a predatory practice that strips a home of its equity before being quickly resold at an inflated price to an unsuspecting buyer. FHA’s new policy will permit the immediate sale of foreclosed properties to legitimate borrowers wishing to use FHA-insured financing.  For a full article, click here: http://www.fhaloanpros.com/2010/01/fha-90-day-rule-put-on-hold/

The HUD directive — http://www.hud.gov/offices/hsg/sfh/waivpropflip2010.pdf

Share and Enjoy:
  • Facebook
  • Twitter
  • LinkedIn
  • MySpace
  • del.icio.us
  • Digg
  • StumbleUpon
  • Technorati
  • FriendFeed
  • RSS
, ,

No comments yet.

Leave a Reply