There are some restrictions, but this is terrific news!!
A couple of Excerpts from the HUD website:
-In todays market, FHA research finds that acquiring, rehabilitating and the reselling these properties to prospective homeowners often takes less than 90 days. Prohibiting the use of FHA mortgage insurance for a subsequent resale within 90 days of acquisition adversely impacts the willingness of sellers to allow contracts from potential FHA buyers because they must consider holding costs and the risk of vandalism associated with allowing a property to sit vacant over a 90 day period of time.
The policy change will permit buyers to use FHA insured financing to purchase HUD owned properties, bank owned properties, or properties resold through private sales. This will allow homes to resell as quickly as possible, helping to stabilize real estate prices and to revitalize neighborhoods and communities.
-The waiver will take effect on February a, 2010 and is effective for one year, unless otherwise extended or withdrawn by the FHA Commissioner.To protect FHA borrowers against predatory practices of “flipping” where properties are quickly resold at inflated prices to unsuspecting borrowers, this waiver is limited to those sales meeting the following general conditions:
—-All transactions must be arms length, with no interest between the buyer and seller or other parties participating in the transaction.
—-In cases in which the sales price of the property is 20 percent or more above the sellers acquisition cost, the waiver will only apply if the lender meets specific conditions.
—-The waiver is limited to forward mortgages, and does not apply to the Home Equity Conversion Mortgage (HECM) for purchase program.