FHA is relaxing their rules, Investors may enter the market again removing the abundant inventory!

January 19, 2010 by Mimi Miller.

Government lifts rule discouraging flipping; homes can be bought and resold within 90 days - In a move that could make foreclosed properties more attractive to investors and increase the number of homes available to first-time buyers, the federal government is temporarily lifting a prohibition against providing FHA mortgage insurance for homes that are resold within 90 days. The waiver on the purchase of flipped houses with FHA mortgages, which begins February 1 and is effective for one year, “will give FHA borrowers access to a broader array of recently foreclosed properties,” HUD said Friday in announcing the change. Conditions attached to the waiver are expected to prevent what HUD called “predatory practices” by investors. For instance when a house is resold within 90 days of purchase at a price that is 20 percent higher, the seller would have to justify the increase, such as by showing how much was spent on repairs and renovation.
http://www.pe.com/business/local/stories/PE_Web_FHA.8f462821.html

Posted in Real Estate | No Comments »