Temporary waiver will give FHA borrowers access to broader array of foreclosed properties
With certain exceptions, FHA currently prohibits insuring a mortgage on a home owned by the seller for less than 90 days. This temporary waiver will give FHA borrowers access to a broader array of recently foreclosed properties.
When Does the HUD Foreclosure Waiver Take Effect?
The waiver will take effect on February 1. 2010 and is effective for one year, unless otherwise extended or withdrawn by the FHA Commissioner.
Are there Limitations to the HUD Waiver?
Yes, the limits to waiver are as follows:
- All transactions must be arms length.
- In cases in which the sales price of the property is 20% or more above the seller’s acquisition cost, the waiver will only apply if the lender meets certain specific conditions.
- The waiver is limited to forward mortgages, and does not apply to the Home Equity Conversion Mortgage (HECM) for purchase program. Specific condition and other details are in the text of the waiver at www.hud.gov
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