The HUD Secretary announced Friday afternoon a temporary lift on the 90 day FHA seasoning rule.
This is HUGE!!!
In an effort to speed sales of distressed properties and homes
that have been rehabbed by investors buying and selling for a profit,
FHA will no longer require that the property be owned by the seller for 90 days!
This rule waiver is scheduled for one year and designed to “stabilize
home values and improve conditions in communities where
foreclosure activity is high”, according to the announcement.
This is going to reduce hold times for investors and increase investor activity. It also
means FHA will insure REO’s for buyers!! Did I mention how BIG this is? This will definitely
stimulate some sales!!
Here’s why this is so great….
For investor resales, FHA is the only way to go right now because they
require only 3.5% down and the seller can contribute up to 6% to
the buyers closing costs, getting them in very, very light when
necessary. Problem was, FHA wouldn’t underwrite any home being
sold within 90 days of the purchase. This rule has squelched many
investors activities and kept them from buying, because they were
being forced to hold the properties longer, increasing their expenses.