FHA flipping rule lifted for 12 months - You can flip to FHA buyers now...but

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In an effort to stabilize home values and improve conditions in communities where foreclosure activity is high, HUD Secretary Shaun Donovan last Friday announced a temporary policy that will expand access to FHA mortgage insurance and allow a quicker resale of foreclosed properties.

FHA currently requires the seller to own (must be on the title) a Sacramento property for a minimum of 90 days before they can sell it to a buyer using FHA financing. Sacramento bank owned property is exempt from this rule....until now!

HUD will lift this restriction for one year beginning on February 1, 2010!

This lift of the 90 day seasoning rule will permit buyers to use FHA-insured financing to purchase homes they previously could not qualify for. You see... there are a ton of Sacramento investors picking up homes and renovating them, so they can quickly resell the home for a profit. In the past, if an investor wanted to sell their home to a FHA borrower, the investor would have to hold the house for 90 days before they could write a contract with the borrower. This made investors seek out conventional and VA buyers, leaving the FHA buyer out of luck.

To protect FHA borrowers against predatory practices of "flipping" where properties are quickly resold at inflated prices to unsuspecting borrowers, this waiver is limited to those sales meeting the following general conditions. The details can be found on our website...

This is great news for flippers!