A week after the US Department of Housing and Urban Development (HUD) lifted its ban on insuring mortgages on homes owned by the seller for less than 90 days, ZINC Financial, a rehab loan lender, expects to see an “explosion” in rehab financing market.

ZINC Financial provides the loans to investors in California, Arizona and Nevada…

Before the ban lifted, investors had to hold onto a property for at least 90 days before a buyer could purchase the property with FHA financing. According to HUD, the ban lifted because of the threat of vandalism and damage vacancies faced if left empty for the full 90 days.

According to ZINC, the policy would stabilize real estate prices and revitalize neighborhoods by permitting homebuyers with FHA financing to purchase REO properties.

“Lifting the 90-day flip rule allows investors to quickly turn properties without having to hold them for 90 days, thereby avoiding the risk of carrying costs, insurance, taxes, and potential property loss due to vandalism,” according a ZINC spokesperson.

Write to Jon Prior.