WASHINGTON \u2013\u00a0 Effective Feb 1, 2010,\u00a0the Federal Housing Administration (FHA) started providing mortgage insurance for some home purchases in which the seller bought the property and held it for less than 90 days.<\/p>\n
The agency changed what is known as the \u201canti-flipping rule\u201d to speed up sales of renovated homes in communities with too many bank-owned and foreclosed homes, says FHA Commissioner David H. Stevens. Waiving the 90-day rule encourages private investors to buy vacant properties, fix them up, and quickly sell them to buyers who are eligible to buy them using FHA financing.<\/p>\n
FHA\u2019s change \u201cis going to be absolutely terrific\u201d for first-time homebuyers hoping to take advantage of the tax credit, says Bobby Taylor, an associate with Coldwell Banker Mountain West Real Estate in Salem, Ore.<\/p>\n
The waiver is limited to sales that meet the following general conditions:<\/p>\n
\u2022 All transactions must be arms-length, with no identity of interest between the buyer and seller or other parties participating in the sales transaction.<\/p>\n
\u2022 In cases in which the sales price of the property is 20 percent or more above the seller\u2019s acquisition cost, the waiver will only apply if the lender meets specific conditions.<\/p>\n
\u2022 The waiver is limited to forward mortgages, and does not apply to the Home Equity Conversion Mortgage (HECM) for purchase program.<\/p>\n