The Dept. of Housing and Urban Development (HUD) announced Friday it will eliminate for one year the Federal Housing Administration (FHA) 90-day anti-flipping rule.??
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FHA???s anti-flipping rule generally prohibits insuring a mortgage on a home owned by the seller for less than 90 days.?? That rule already has been waived for certain transactions, including REOs.?? Beginning Feb. 1, 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 broader array of recently foreclosed properties.??
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Under the temporary waiver, all transactions must be made at arm???s-length and may require additional documentation of improvements and justification of certain price increases.?? Additional documentation may include a second appraisal and a property inspection ordered by the lender.
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C.A.R. recently submitted a letter to FHA Commissioner David Stevens detailing the challenges facing many FHA home buyers, such as the lack of housing inventory available to them, and the need to revise this rule to reflect current market conditions.?? The reexamination of the 90-day anti-flipping rule was passed as an action item during C.A.R.'s board of directors meetings in October.
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For further information, please visit:??
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http://portal.hud.gov/portal/page/portal/HUD/press/press_releases_media_advisories/2010/HUDNo.10-011
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Copyright?? 2010, California Association of REALTORS?? (C.A.R.).?? Used with permission provided by the C.A.R. Legal Department.
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