Explore Properties at Southern California: HUD Announced Waiver of its 90 Day Flipping Rule for FHA Loans

HUD took action to speed resale of foreclosure properties to new owners ... with purpose to help bring stability to home values and accelerate sale of vacant properties.

The HUD 90 day flip rule has been temporarily waived for all sellers effective February 1, 2010.

HUD said on January 15, 2010, about this change for FHA insurance on loans:

Pursuant to §7(q) of the Department of Housing and Urban Development Act (42 USC 3535 (q)) and 24 CFR 5.110, I hereby waive §203.37a(b)(2) of the regulations. The regulations at 24 CFR §203.37a(b)(2) provide that a mortgage for a property will not be eligible for FHA insurance if the contract of sale for the purchase of the property is executed within 90 days of the prior acquisition by the seller, and the seller does not come under any of the specific exemptions that apply to the 90-day rule.

This waiver, which takes effect on February 1, 2010, is limited to those sales meeting specific conditions.

There are requirements about what seller holds title to the property and no pattern or prior flipping activity for subject property.

Requirements that property was marketed openly and fairly, via MLS, auction, For Sale by Owner offering, or developer marketing (any sales contracts that refer to an "assignment of contract of sale," which represents a special arrangement between seller and buyer may be a red flag).

HUD wants to move some bank-owned inventory, and this moratorium does applies to bank owned and REOs only.

Private party buyers of foreclosure homes must still wait the 90 days before reselling a property with FHA financing.

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Harrison K. Long, Explore Group, Coldwell Banker Previews, Irvine, CA. Irvine Realtor. CA DRE #01410855. ExploreProperties@gmail.com.