FHA Suspends 90 Day Flipping Rule

As I search the Maple Grove Homes for Sale, I find that most of these properties are excellent candidates for a rehabber to buy, fix and resell.  this is often called flipping a property.  The prices of these houses are low enough, but they are in decent areas with good bones for someone to take this otherwise unlivable house fix it up and sell it making a profit.  This is a win for the rehabber, the buyer, the neighborhood, and the economy.

For years, one frustration of the rehabber doing the flip was with buyers using FHA financing.  Unfortunately, FHA frowned on flippers and probably some of that suspicion was warranted as there have been some unscrupulous ones in the past.  Unfortunately, FHA has a rule that prohibits insuring a mortgage on a home purchase that the seller has owned for less than 90 days.  Since most of these flips take 30-60 days, the rehabber was always running into this restriction in certain areas that were high in FHA buyers (mostly first time home buyer areas).

Thankfully, HUD realized that these rehabbers are buying and repairing homes that otherwise are not livable and could not be purchased by a normal buyer.  Effectively, the rehabbers are reviatilizing many neighborhoods decimated by the foreclosure market.  This is especially true when you look at Saint Paul Homes for Sale.

In response to this realization, HUD has announced a temporary waiver that removes the restriction.  This policy change took effect on February 1, 2010 and will run for 1 year unless extended or withdrawn.  This smart move should further encourage investors and rehabbers to spend their hard earned money on homes to help stabilize the hardest hit areas.