FHA financing is more prominent in Pasadena now then ever before. We get phone calls from many first time home buyers who feel that they are able to buy a home now that the prices are lower, first time home buyer tax incentives are available and FHA is offering 3.5% down payment opportunities.
One of the difficulties that my home buyers have experienced was trying to purchase homes with FHA financing that have been bought and rehabbed by investors. FHA has a very strict “no flipping” within 90 days of purchase rule.
That rule pretty much “ruled” out FHA home buyers from making offers on many homes last year since sellers were reluctant to enter into contracts unless the buyer had conventional financing and were able to close escrows quickly.
Well… the good news is that beginning February 1st, 2010, FHA has lifted the “90-day” waiting period.
Lifting the waiting period “will allow homes to resell as quickly as possible, helping to stabilize real estate prices and to revitalize neighborhoods and communities,” HUD said.
However, lenders will require supporting documentation or a second appraisal if the sales price of a home increases by more than 20 percent from the seller’s acquisition cost, HUD said in publishing the waiver requirements. The waiver does not apply to the Home Equity Conversion Mortgage (HECM) for purchase program.
You can read the full announcement at the HUD website.