HUD Waives 90 Day Seasoning for Purchasers.

HUD Waives 90 Day Seasoning for Purchasers.

HUD has decided to waive the 90 day seasoning financing contingency for buyers.

Effective February 1st 2010, there will no longer be a requirement for a seller of a property to be on title for 90 days or more in order for approval of an FHA backed loan. This is incredible news, since the majority of buyers in today’s market are FHA buyers!

If you are planning on investing in foreclosures via short sales the time is now.

The 90 day seasoning issue has long been an issue for investors and agents when working with short sales. This is changing on Feb 1st.

Below is an excerpt from the HUD website: www.hud.gov

"In today’s market, FHA research finds that acquiring, rehabilitating and the reselling these properties to prospective homeowners often takes less than 90 days. Prohibiting the use of FHA mortgage insurance for a subsequent resale within 90 days of acquisition adversely impacts the willingness of sellers to allow contracts from potential FHA buyers because they must consider holding costs and the risk of vandalism associated with allowing a property to sit vacant over a 90-day period of time."

"The policy change will permit buyers to use FHA-insured financing to purchase HUD-owned properties, bank-owned properties, or properties resold through private sales. This will allow homes to resell as quickly as possible, helping to stabilize real estate prices and to revitalize neighborhoods and communities."

This will have such a positive impact on the housing market, investors, agents, buyers, sellers, and everyone else as a whole! It’s about time. We’ve been anticipating this, and it has arrived.

Ok, here are a few important key points. There a few simple stipulations that are part of this rule, which are actually quite simple to meet. Another – it’s only supposed to last for one year. I anticipate that this will change, once they realize the positive impact this has on the housing market and economy as a whole.

Here are a few more rules:

The waiver will take effect on February 1, 2010 and is effective for one year, unless otherwise extended or withdrawn by the FHA Commissioner. 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:

- All transactions must be arms-length, with no identity of interest between the buyer and seller or other parties participating in the sales transaction.

- In cases in which the sales price of the property is 20 percent or more above the seller’s acquisition cost, the waiver will only apply if the lender meets specific conditions.

- The time is now investors properties will be popping up on the market.

Thanks

Admin