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What Are FHA Flipping Rules

The FHA 90-Day Flip Rule

If you plan topurchase a flipped homewith an FHA loan, you must abide by the FHA 90-day flipping rule. This rule states the seller of a flipped home must own the home for more than 90 days before a buyer can purchase it using FHA financing. As an FHA home buyer, you must wait until the seller has owned the home for at least 91 days before you can sign a purchase contract.

Guidelines For Sales Between 91 – 180 Days

There is also a flip rule for a property resold after the seller has owned it for 91-180 days. If the purchase contract:

Is dated between 91 and 180 days from the date the seller acquired title to the home

The purchase contract has a purchase price that is double or more than what the seller paid for the home

Then, a second appraisal is required for an FHA loan. The second appraisal must meet the FHA guidelines, including that:

A different appraisermust complete the second appraisal

The appraisal cannot be paid for by the buyer

If the second appraisal value is 5% or more lower than the first, the lower value is used

FHA Flipping Rule Exceptions

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