One pesky government policy that has prevented reasonable sales of foreclosed properties has been a requirement that a new buyer cannot get FHA financing for a property until after the prior owner held it for three months. The so called “seasoning” rule required an investor who purchased a home at a foreclosure auction to sit on it for three months after purchase before it could be flipped or sold to another party.
The rule had the effect of preventing many investors from entering the market because they did not want to carry these homes that long, preferring instead to buy them, fix them and turn around and sell them for a profit quickly. The new rule change will now allow this to occur and it should bring buyers looking to flip properties back into the foreclosure market.
This is a positive development. The full text of the rule can be found here.
