FHA Lifts 90 Day Seasoning Ban for Investors!

FHA announced that they will temporarily lift the ban requiring 90 day seasoning before the property can be sold to a buyer wishing to use FHA financing. This will go into effect February 1^st, 2010 and be in place for one year unless otherwise extended or withdrawn by the FHA Commissioner. If FHA discovers there is a significant increase in mortgage defaults or mortgage insurance claims attributable to insured mortgages obtained through this waiver, the Commissioner may, at his discretion, withdraw this waiver immediately.

There are a few conditions that must be met which are highlighted below. I have also attached a document that goes into a little more specific detail that you may find helpful.

· All transactions must be arms-length, with no identity of interest between the buyer and seller or other parties participating in the sales transaction.

· In cases in which the sales price of the property is 20 percent or more above the seller's acquisition cost, the waiver will only apply if the lender meets specific conditions.

· The waiver is limited to forward mortgages, and does not apply to the Home Equity Conversion Mortgage (HECM) for purchase program.

Below is the link announcing this policy change:

http://portal.hud.gov/portal/page/portal/HUD/press/press_releases_media_advisories/2010/HUDNo.10-011