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Neighborhoods, Buyers and Investors benefit from FHA Rule Change

March 16, 2010

Buyers in the present market are finding that FHA mortgages are the only low down payment financing available. As a result the number of FHA loans has increased. In response, the government insured, FHA mortgages are getting some rule changes.  Suspending the ’90 day no flipping’ rule is a change that benefits neighborhoods, buyers, as well as investors who buy properties to renovate and resell.

The ’90 day no flipping’ rule  requires that the purchaser of a property hold title to the property for at least 90 days before it can be sold and financed with a FHA mortgage. In the previous market investor responded by not accepting FHA financing, a reasonable option when there were other financing choices. In the present market it means that distressed properties are sitting, unsold, driving down property values and neighborhood livability.

FHA has responded to the present market by suspending theirrule for one year beginning Feb. 1, 2010. This is welcome news for both investors, and for buyers looking for newly renovated homes to buy. 

To qualify for the exemption, homes must be listed for sale and fairly offered to the market, the selling price must be supported by improvements in the property or otherwise explained by the real estate appraiser.   Two appraisals may be required. Lenders may require home inspection reports by qualified home inspectors,  provided to the buyer at the buyer’s expense.   Sellers must have title to the property. Buyer and seller can not be related to each other.

There are some properties available to home buyers that have always been exempt, and that can offer great values to  buyers. These include properties owned by HUD, or the VA or other government agencies, as well as recently inherited properties.

For more detailed information you can read the rule at HUD’s web site:  HUD.gov.

To find the right property for your needs contact:

Kathleen Sheridan, Realtor®, WEICHERT, Realtors® – McCarthy Associates, 6901 Germantown Ave, Philadelphia, PA 19119 email:ksheridanrealtor@gmail.com

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One Comment leave one →
  1. March 20, 2010 3:34 pm

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