No more 90 Day seasoning rule for FHA loans

On January 15th 2010, the Federal Housing Administration (FHA) temporally waived their rule of a 90 day seasoning rule for sellers. Starting February 1st 2010, FHA will allow sellers who have owned properties for less than 90 days to sell these properties to buyers who are using FHA for their financing. Prior to this waiver, FHA required the sellers to own the property 90 days before a buyer could enter into a contract to purchase using FHA financing. In 2009, FHA changed the 90 day policy to allow banked-owned properties to be exempt from the 90 day rule. FHA now feels they can help the future housing market by allowing investors to sell properties before they have owned them 90 days, thus speeding up the time properties are on the market. Here are some of the FHA requirements that we know about currently:



· This waiver is available for one year, from February 1st, 2010, unless extended.

· All transactions must be at arm-length - meaning no identity of interest can exist between buyer and sellers.

· If sales price is 20% or more of the seller's acquisition cost, the lender must provide supporting documentation and/or a 2nd appraisal and order a inspection of the property and provide it to the buyer.

· Waiver is only for forward mortgages, not reverse mortgages.



Stay tuned for actual investors guidelines for this. As with any change to FHA guidelines, individual investors will have their own over lays (rules).