In an effort to stimulate more sales and stabilize the real estate market the Department of Housing and Urban Development, better known as HUD, has waived the "90-day flip rule."
The rule was put in place to protect buyers from predatory speculators who would purchase properties on the cheap, make low cost cosmetic repairs, and place the houses back on the market in an effort to pull a large profit. Many innocent buyers were left with substandard homes, and little recourse to the mitigating of damages. HUD, which oversees the FHA government insured mortgage program has not allowed FHA financing for homes that seller have owned for less than 90 days.
That rule will now be waived for the next year. Effective February 1, 2010 any buyer acquiring financing with an FHA mortgage can purchase any property regardless of how long it has been owned by the seller. This change will allow many buyers, a lot of them first-timers, to choose from the entire inventory of available homes. It will also allow many investors to quickly turn around rehabbed properties, and get them sold. The safeguard from the scumbags out there, of course will be your licensed REALTOR! Choose wisely.
The effect this will have may help stabilize pricing and create more activity in the housing market. Another potential result will be to revitalize blighted neighborhoods in areas where vacant properties are rampant.
See the press release from HUD here
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