A huge percentage of today's sales are to buyers obtaining FHA financing. HUD has required the seller in these transactions to have held ownership for a minimum of 90 days before they can enter into a sales contract/open escrow.

HUD has recognized the fact that many foreclosed homes sold by them (or lenders who provided FHA financing) are in need of repairs and updates to qualify for a new FHA loan. They determined that the 90-day seasoning was limiting the sales of inventory and hindering the stabilization of the real estate markets.

HUD has just released information on a waiver of the 90-day seasoning requirement (subject to certain restrictions). The waiver will take effect February 1, 2010, and is good for one year. A few points to remember:

• Arms-length transaction
• Seller must be in title (no assignment of contract)
• If Seller is an entity, it must be duly formed under appropriate state laws
• No pattern of flipping over the past 12 months
• Property must be marketed openly and fairly (MLS listing would apply)

• Loan file must document improvements done to increase value, or have a second appraisal to support increase
• Inspection report must be done & provided to buyer