February 1, 2010  Yuma, AZ -- A new rule is expected to make homes more affordable for first-time buyers but with strings attached.  Effective Monday, lenders can choose to lift the 90-day rule.  That's the time investors have to wait before selling a property to buyers approved by the Federal Housing Administration(FHA). 

"They lifted that ban and said we understand that most properties can be serviced or rehabilitated in under 90 days, and in this market, we need to be able to sell as many as possible," says Derek Egeberg with Territorial Mortgage Co., LLC.

Egeberg says the new rule could make homes more affordable for those seeking properties in the lower price range.

"In this market 40-percent of all mortgages have been going FHA so that does open up a big window."

However Egeberg says proceed with caution.  There are some drawbacks to ditching the 90-day rule such as added costs.

"Now instead of one appraisal at, let's say, $400 to $450, you have a second $450 appraisal expense to the buyer, you have a third party home inspection which could be $350 to $450," says Egeberg.  In other words more red-tape for the seller equals a higher price for the buyer.

The final word comes from the lender.  They decide whether to follow the 90-day rule.  Egeberg suggests home-seekers to have a talk with their lender to make sure they understand all of the terms.

"You just need to sit down with somebody and develop that relationship of trust and know that you're going to be treated well and advised correctly."