FHA to Suspend 90 Day Resale Waiting Period

The Federal Housing Administration announced today it will temporarily lift the 90-day waiting period for property resales financed using an FHA loan. The 90-day waiting period was established in 2003 to help counter predatory lending practices and investor house flipping. Because of the glut of foreclosed and abandoned homes that are harming many neighborhoods, FHA will lift the waiting period for one year.

While Federal Housing Commissioner Brian Montgomery said "The action we take today will allow home buyers to purchase these homes in much greater numbers and ease the excess supply of unsold homes in neighborhoods across the country," the move will not be as substantial as one might think. The reason for this is because FHA also requires that homes purchased with loans it guarantees to be in move-in condition and many lenders still won't be able to resell their foreclosed upon homes until they make the repairs needed to bring them up to FHA standards. The likelihood of lenders jumping on that bandwagon seems slim, especially in hard hit areas where they may have numerous properties on their books.

Still, it is another step in the right direction to help with the current housing situation throughout the country. Any steps the government can make to hasten the housing recovery (short of a bailout) are to be applauded.

Metro Mortgage Company is a federally regulated Mortgage Banker specializing in Conventional, Jumbo and FHA/VA home loans throughout Florida. Call us today at 888-617-3674

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