If you’ve tried to buy a foreclosed home within the last 6 months, you found that if you were using an FHA loan, you were unable to get financing because of the requirement that limited FHA from insuring homes owned less than 90 days by the current owner. Most of the affordable homes were purchase by investors and then placed back on the  market in less than 90 days. Home buyers were unable to purchase these home because of the 90 day seasoning requirements.

To fix this problem, HUD Secretary Shaun Donovan said:

“As a result of the tightened credit market, FHA-insured mortgage financing is often the only means of financing available to potential homebuyers,” said Donovan. “FHA has an unprecedented opportunity to fulfill its mission by helping many homebuyers find affordable housing while contributing to neighborhood stabilization.”

This change in policy is only temporary and will expire one year from the starting date of February 1, 2010. There are also some restrictions. To read more about this click here.

Here is a great video for home buyers about the home buying process. The first series explains the bank qualifying process. Check back for more series to come.