From The HUD Website comes some welcome news for property investors and many home buyers.
FHA is temporarily (1yr) relaxing their “90-day resale” or anti-flipping rule, which prohibits the use of FHA insured financing if the contract for sale was executed within 90 days of the sellers acquisition of the property:
FHA finds that eliminating the 90 day resale restriction for buyers will give FHA a greater opportunity to dispose of it’s single family REO properties in a way that maximizes return to the FHA’s mortgage insurance fund; also, permitting buyers to use FHA-insured financing to purchase other bank-owned properties, or properties sold through private sales for resale, will help create market conditions that will allows homes to resell as quickly as possible, thus helping to stabilize real estate prices as well as helping to stabilize neighborhoods and communities where foreclosure activity has been high.
As always, there are rules – chief among them: The sale must be arms-length (buyer and seller cannot, know, be related, or have a professional or personal affiliation,) and if the sales price has increased by 20%, buyers are required to get a home inspection, and the appraiser must affirm that the price increase is warranted.
Read the Full Details Here [HUD PDF]