UPDATE: HUD Temporarily Suspends 90 Day Seasoning Requriement

On May 1, 2003, The U.S. Department of Housing and Urban Development ("HUD") imposed a 90 Day Title Seasoning requirement for all new FHA loans. Shortly after the January 16, 2010 Legal Minute aired on the Real Estate Radio Hour pertaining to seasoning, HUD temporarily suspended title 24 CFR §203.37a(b)(2), which is the 90 Day Title Seasoning Requirement. This is only a temporary suspension. Starting February 1, 2010 and expiring on 1/31/2011, First time Home Buyers who apply for an FHA loan will not have the 90 Day Title Seasoning Requirement.

See HUD's Press Release.

Here are the 6 things you need to know about these changes:

1. Waiver takes effect February 1st, 2010 for a period of one year unless extended.
2. Investors are now exempt from the 90-day seasoning rule.
3. All transactions must be arms-length.
4. No identity of interest can exist between buyer and seller.
5. If sale price is 20% or more of the seller's acquisition cost, the lender must:
   1. provide supporting documentation and/or a second appraisal and
   2. order an inspection of the property and provide it to the buyer.
6. The waiver is limited to forward mortgages only.