The 90-Day Seasoning Waiver Has Been Expanded

(Originally posted Monday, January 25, 2010)

90 Day Flip Rule Changes

This update from FHA was released on Friday January 15th, 2010, as an excerpt from the CFR (Code of Federal Regulations) without a corresponding Mortgagee Letter and contains information about FHA's policies regarding the waiver of the 90-day seasoning required for sellers.

Here are the 6 things you need to know about these changes:

1. Waiver takes effect February 1st, 2010 for 1 year unless extended.
2. Investors are now exempt from the 90-day seasoning rule.
3. All transactions must be arms-length.
4. No identity of interest can exist between buyer and seller.
5. If sale price is 20% or more of the seller’s acquisition cost, the lender must:
a. provide supporting documentation and/or a second appraisal and
b. order an inspection of the property and provide it to the buyer.
6. The waiver is limited to forward mortgages only.