FHA has finally come to their senses! Effective February 1, 2010, investors will be granted an exemption to the 90 day seller seasoning rule. Otherwise known as the anti-flip rule. HUD determined that properties take less than 90 days to rehab and making buyers wait increases holding costs thus making the properties less affordable and increasing the chance of vandalism due to vacancy.

The waiver expires in one year.

There are certain conditions:

1. All transactions must be arms length so selling among relatives is prohibited.

2. If you? Are selling for more than 20% of your acquisition cost, you must justify the value by providing documentation of your repairs and/or a second appraisal.

HUD.gov

This is the best news I have heard all day. Should help speed things up a bit.

I am sure it will.

This is fantastic news.

Anyone know the rules about selling for more than 20% of your acquisition cost?

That is good news, considering there has been little to no good news in almost two years for investors. Now if you could refinance w/o 25% equity, investor's could get out from the arms and lock in on the good rates.

pogibaby, he listed the 20% rules above. Repairs must be documented for review/a second independent appraisal must be obtained. The rules are on the HUD site.
This is great news in the higher priced markets, but in areas that have lower priced homes its not going to change anything. If an investor buys a house for 40,000, they are typically looking for a return larger than 8k. And it is difficult to get lenders to approve the repair substantiation. I havent seen one go through yet. I do have one that is supposed to close next week that they have made the buyer jump through hoops on, so we will see.

I know a lot of real estate investors in Manassas, Virginia that are happy with this ruling because they can do more deals. I have not done any HUD properties yet myself.

John