| HUD Secretary Shaun Donovan announced on | | | | This change in policy will allow investors to use FHA |
| January 15, 2010 a temporary policy that will expand | | | | Insured Financing to purchase HUD Properties, bank |
| access to FHA mortgage insurance. Investors will now | | | | owned properties, or private sale properties. As a |
| be allowed to quickly resell foreclosed properties. | | | | result homes should sell quickly, aiding in stabilizing |
| Previously FHA would not insure a mortgage on a | | | | prices in real estate and rejuvenating neighborhoods |
| home owned by a seller for less than 90 days. This | | | | and communities. |
| ruling has been temporarily lifted and will give investors | | | | To protect buyers against predatory practices of |
| access to a wider range of foreclosed properties. The | | | | "flipping" these homes at inflated prices, certain |
| waiver will take effect on February 1, 2010 and will be | | | | conditions have been set: |
| effective for one year. HUD has reserved the right to | | | | - All transactions must be arms-length. There can be |
| stop or extend the program at any time. | | | | no relationship between the buyer and seller or anyone |
| The FHA found that buying and preparing foreclosed | | | | participating in the sales transaction. |
| properties for resale usually took less than 90 days. By | | | | - If the sales price is more than 20 percent of the |
| not allowing the use of FHA mortgage insurance for a | | | | seller's purchase cost, the waiver will only apply if |
| quick resale within 90 days of purchase they found it | | | | specific conditions are met. |
| stopped sales to investors. Investors do not want the | | | | - The waiver is limited to new mortgages. |
| extra expense of holding costs or the threat of | | | | To find out more about this program go to HUD's |
| vandalism that could happen during the 90 day holding | | | | website or contact your local Certified Distressed |
| period. | | | | Property Expert. |