Good News!
February 1, 2010 is the date we have been waiting for!
The 90 day “flip” rule that FHA imposed to slow down the turn around time for investors to flip houses has been suspended for a year – until 2/1/11.
What does this mean? Well, as an active Buyer’s agent I can say that I have had to say 100′s of times to my very excited FHA Buyer, “sorry, you can’t make an offer on this home because the 90 day rule applies”. It’s like popping a balloon! They are confused and I explain that the rule means that an investor has purchased the home less than 90 days ago at a very low price because the home is distressed. The investor then “rehabs” the home with carpet, paint, landscaping, etc. so the home is brought up to speed for the neighborhood.
Then the investor lists the house with a Realtor but if its still within the 90 day time frame, only buyers approved for a conventional loan of 10-20% down payment or an all cash Buyer can purchase the home. The rule “protected” the Buyer from an investor who was trying to make a lot of $$ in a short time and inflating prices in the neighborhood thus making for another over inflated market like we experienced just a few years ago.
I think the flip rule was not that effective because the houses still sold to other “investors” who were just too lazy to do the work themselves. The only Loser in this whole scenario was the 1st time FHA Buyer who really wanted to buy a house but was discouraged time and again by the “90 day flip rule”.
So, Hooray for whoever got this rule suspended. Homeownership is for everyone – not just the investors who are trying to make a quick buck. The thrill for the 1st time homeowner is back, as it should be!
