Beginning Feb. 1, the Federal Housing Administration will provide mortgage insurance for some purchases in which the seller bought the property and held it for fewer than 90 days.

The agency is changing what is known as the “anti-flipping rule” to speed up sales of renovated homes in communities with too many bank-owned and foreclosed homes, says FHA Commissioner David H. Stevens.

This is good news for many reasons: Private investors will be encouraged to buy properties that are not in livable condition, fix them up to comply with FHA guidelines and then re-sell them to FHA buyers. Most of these buyers have been in a holding pattern due to the massive inventory of properties that are not suitable for this type of financing.

These FHA buyers can now come to the plate to take advantage of the tax credit that was intended to jump start the the real estate market through the first time buyer primarily.

This positive move can also stimulate other industries that feed of the real estate market, like general contractors, roofers, home inspectors, house cleaning and gardening, as well as home improvement stores -just to mention a few.

Beginning Feb. 1, the Federal Housing Administration will provide mortgage insurance for some purchases in which the seller bought the property and held it for fewer than 90 days.

(more…)