The 90 day flip rule waiver reduces the time an investor has to wait to sell their recently purchased property.
Most first time buyer use FHA financing to make their purchase because of the low down payment requirements. FHA guideline mandated that borrowers can not purchase a home that has been “flipped” within 90 days regardless of the value of the property. This has dicourage investors from buying and re-habing properties because so many of the potential buyers could not qualifiy to buy the property due to the 90 day flip rule.
Buyers that need financing have found themselves unable to compete with cash buyers- especially with distressed properties which have imperfection that lenders would rather stay away from.
Summary
Investors will buy, fix and resale more properties which will create more inventory for buyers that need financing for their purchase.
The waiver of the 90 day flip rule is set to last until 2/1/2011.
