Good news for local Twin Cities house flipper’s (those that buy cheap houses and put $10,000 life’s work into it and sell for massive profit or attempt) the FHA 90 day seasoning rule has been temporarily lifted starting in February 1st and running for a year.
Here is the release from HUD.
If you are unfamiliar with the seasoning rule, it is meant for an arms-length transaction for all parties.
The overall goal for a property investor that is flipping houses is to buy low, throw some money at house and sell high, along with having the property for the least amount of time. Here lies a small problem, when the seasoning rule was first introduced FHA wouldn’t insure a home loan if it had changed hands of title unless the previous owner had ownership of 90 days or more.
Being that a large buyer pool are using FHA loans, no-go on getting in on freshly renovated properties that are agressiveley priced and are actually selling.
The overall goal is to move FHA-REO properties a lot quicker and stabilize market conditions.
Good for both buyers and flippers.
