Real estate investors and the Realtors that work with them are very familiar with what is commonly known as the the 90 day rule which prohibits FHA financing on a property that the current seller has owned for less than 90 days. HUD had relaxed the 90 day rule for one year beginning February 1, 2010 to assist in the sale of foreclosed homes.
As a buyer, you may be asking what does this mean to me? It allows a buyer that is using FHA financing to now buy a home that a real estate investor has recently bought then remodeled and put back on the market for sale without having to wait for the 90 day time period to expire.
I regularly work with investors in the Augusta Georgia area that will buy a REO or bank owned property and invest tens of thousands of dollars into a remodel before placing it back on the market for resale, most of the time below market value for a quick sale. Experienced investors can have a home completely remodeled and ready to be sold in 30-45 days, which can cause a time period of up to 60 days that a great home was available but could not be purchased by FHA buyers.
Of course there will still be conditions that must be met to ensure there is no type of fraud involved in the transaction. Legitimate investors that do quality remodels welcome these conditions and should have no problems meeting them.