FHA 90-Day Flip Rule: What Buyers and Sellers Must Know
Purchasing a home with FHA financing comes with unique guidelines, including the 90-day flip rule—a regulation designed to prevent quick resales at inflated prices. This rule affects real estate investors, homebuyers, and agents, so understanding its nuances is essential for a smooth transaction.
What Is the FHA 90-Day Flip Rule?
The FHA 90-day flip rule requires that a seller must own a property for at least 90 days before selling it to a buyer using FHA-insured financing. The purpose of this rule is to prevent property flipping—where homes are resold for significantly higher prices without substantial improvements—protecting buyers from inflated home values and potential fraud.
This restriction does not prevent a seller from listing or selling the home—it simply restricts FHA buyers from purchasing it within the first 90 days.
How the Rule Works
The 90-day period begins on the date the seller’s Deed is recorded (the date they legally acquire the property).
The resale date is the date all parties execute the new purchase contract.
If a home is resold within 90 days, it is not eligible for FHA mortgage insurance and cannot be financed with an FHA loan.
For homes sold between 91-180 days, the FHA may require an additional appraisal if the new purchase price is 100% or more than the seller’s original purchase price.
After 180 days, no resale restrictions apply, but additional appraisal reviews may still be requested.
Example: FHA 90-Day Flip Rule in Action
To illustrate how the 90-day rule applies, consider this scenario:
A seller’s Deed was recorded on December 9, 2024.
The earliest date an FHA buyer can execute a contract is March 10, 2025 (the 91st day).
If a purchase contract is signed before March 10, 2025, FHA financing is not allowed.
If the property is sold between March 10 and June 7, 2025 (91–180 days), an additional appraisal may be required if the new price is 100%+ higher than the seller’s purchase price.
Exceptions to the FHA 90-Day Flip Rule
While the anti-flipping rule applies in most cases, some exceptions allow for FHA financing within the 90-day period:
Inherited Homes – If a property is being resold due to inheritance, the rule does not apply.
HUD-Owned REO Sales – Properties sold by HUD after foreclosure are exempt.
Government-Backed Sales – Homes purchased through government programs or relocation sales (such as a job-related move) are not subject to the rule.
Who Does the FHA 90-Day Rule Impact?
Investors & Flippers: Must factor in the 90-day waiting period when buying, rehabbing, and reselling a property.
FHA Buyers: May experience limited inventory of newly renovated homes and possible delays if an additional appraisal is required.
Real Estate Agents: Need to verify ownership history to prevent contract issues and ensure FHA buyers are eligible for financing.
Final Thoughts: How to Avoid FHA 90-Day Rule Pitfalls
Verify the seller’s Deed recording date before making an FHA-financed offer.
Plan ahead if purchasing a recently flipped home—delays can occur if appraisal reviews are needed.
Work with an experienced real estate agent to navigate FHA’s requirements.
The FHA 90-day flip rule protects buyers from overpriced, quickly resold properties, but it’s essential to understand how it impacts timelines and financing eligibility. If you’re considering an FHA purchase or need help selling a recently flipped home, Capstone Realty Professionals can guide you through the process.
📞 Contact us today to ensure your FHA home purchase goes smoothly!
