According to the AP, the only 5 year old rule regarding the 90 day waiting period for FHA loans is being temporarily suspended. This could be great news for investors and buyers in Morgan Hill, Los Gatos, Alamaden Valley, Blossom Valley, San Jose and many other communities in Santa Clara County where more and more homes are being subject to foreclosre proceedings.

The rule stated that a foreclosed home could not be purchased with government backed loans within 90 days after the foreclosure. The reason for this rule was a direct response to "flipping" schemes designed to overcharge buyers for distressed and foreclosed properties.

The good news here is that for the legitimate investor who is taking distressed or undesirable properties and turning them back into  sought after homes, there will be a larger number of buyers who can potentially purchase the property.

All those buyers that might use a government back loan can now potentially purchase a home, even within that 90 day period.

The primary reason for this change was the more pressing need to get the huge inventory of foreclosed homes off the books.

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