FHA Flip Rules
The 90-day rule, second appraisals, and your options as a buyer
The FHA flip rules restrict how quickly a property can be resold using FHA financing.
If the seller hasn’t owned the home long enough, FHA financing is simply off the table.
The core rule: if the seller’s deed was recorded fewer than 90 days before your contract, FHA is not available.
This matters most for buyers using FHA loans to purchase recently renovated homes.
The rule also creates conditions where a second appraisal can change your loan amount mid-deal.
By the end, you’ll know the timelines, the exceptions, and your options when the timing doesn’t line up.
In This Article
What FHA Flip Rules Are and Why They Exist
The FHA flip rules limit when financing insured by the Federal Housing Administration can be used to buy a recently resold property. The core concern is straightforward: investors who buy homes cheap, make minimal changes, and resell quickly at inflated prices can leave FHA buyers holding a mortgage larger than the home is worth. The rules put a time-based check on that risk.
Understanding FHA loan requirements helps explain why this protection matters. FHA loans allow down payments as low as 3.5%, and borrowers with credit scores as low as 580 can qualify. That accessibility is exactly why FHA buyers carry a smaller equity cushion at the start. If a property is overvalued at purchase, they have less room to absorb the impact.
The pattern that prompted these rules goes back to the early 2000s. Investors bought distressed homes cheap, applied cosmetic fixes, and quickly resold them to FHA buyers at steep markups. Buyers ended up underwater. HUD put anti-flipping restrictions in place to close that loop, and those restrictions have stayed because investor flipping never fully stopped.
In 2025, flipped homes made up 7.4% of all home sales nationally, and 11.3% of those flipped homes sold to FHA buyers, according to ATTOM’s 2025 Year-End Home Flipping Report. In markets like Colorado Springs, the Denver metro, Tampa, and the Orlando area, renovated investor properties are a regular part of the available inventory. FHA buyers encounter this rule more often than they realize before they start shopping.
How the 90-Day Rule Works
The 90-day rule is the foundation of the FHA flip restrictions. A buyer cannot use FHA financing to purchase a property if the seller acquired it fewer than 90 days ago. No renovation work, no documentation, and no price justification changes that. The restriction applies to most standard residential transactions without exception.
The clock starts on the date the seller’s deed was recorded with the county, not the date they closed. This distinction matters. Recording happens after closing, sometimes several days later. A seller who closed on January 1 might not have a recorded deed until January 5. The 90-day count begins on January 5, not January 1. That gap can be the difference between a transaction that works and one that doesn’t.
The clock ends on the date you and the seller sign the purchase contract, not when you reach closing. Both dates need to come from official records. Relying on what the listing agent or seller says about timing is a mistake we’ve seen cause real delays.
Here’s a concrete example. A seller’s deed was recorded on February 1. You find the home and want to write an offer on April 28. That’s 86 days from the recording date. FHA financing is not allowed. You’d need to wait until May 3 (day 91) to sign the contract. If the seller won’t hold the property that long, you’d need a different loan program or a different home.
We see this issue come up most often after an offer is already accepted. The buyer fell in love with the home, moved quickly, and nobody checked the recorded deed date before writing the offer. Your lender should verify the seller’s deed recording date before you go under contract on any home that looks recently renovated. That check takes minutes. Catching it late costs weeks.
The 91–180 Day Window: Second Appraisals and the 5% Rule
Clearing the 90-day mark doesn’t mean the transaction is free of restrictions. If the property is resold between day 91 and day 180, the lender checks whether the price has jumped sharply from what the seller originally paid.
If the new sale price is 100% or more above the seller’s acquisition price, the lender must order a second independent appraisal. That’s not 100% above appraised value. It’s 100% above the seller’s original purchase price. A home the seller bought for $180,000, now listed at $360,000 or more, triggers this requirement. The lender or seller covers the cost. The buyer cannot be charged for the second appraisal.
Here’s where the stakes shift. If the second appraisal comes in more than 5% below the first, the lender must use the lower value to calculate the loan amount. That can shrink the loan by tens of thousands of dollars.
Consider a real example. You offer $300,000 on a home the seller bought for $140,000 five months ago. That’s a 114% price increase, so a second appraisal is ordered. The first appraisal comes in at $300,000. The second comes back at $277,000. That’s more than 5% below the first. Your loan is now based on $277,000. You’d need to cover the $23,000 gap in cash, renegotiate the price, or walk away. That’s a significant shift that catches buyers off guard when it happens late in the process.
“The buyers who struggle most with this rule aren’t the ones who hit the 90-day block. Those deals get flagged early and everyone adjusts. It’s the buyers in the 91 to 180 day window who get surprised. They think the hard part is behind them, and then the second appraisal comes back lower and changes the whole deal.”
Reed Letson, Owner, Elevation Mortgage
This is exactly the kind of situation where having a lender review the seller’s acquisition price and the current listing price before you write an offer protects you from renegotiating under pressure. The math here can move fast, and the buyer is the one most exposed when it does.
When FHA Flip Rules Don’t Apply
The FHA flip rules include specific exemptions. If a property falls into one of these categories, neither the 90-day restriction nor the second appraisal requirement for the 91-180 day window applies.
| Exception | What It Covers |
|---|---|
| HUD REO Properties | Homes acquired by HUD through an FHA insurance claim and sold through HUD’s REO program. |
| Bank-Owned and Government REOs | Properties sold by lenders, Fannie Mae, Freddie Mac, or other government agencies after foreclosure. |
| Inherited Properties | Homes sold by someone who received the property through inheritance. The seller did not purchase it on the open market. |
| Employer or Relocation Sales | Properties sold by an employer or relocation agency as part of an employee relocation program. |
| New Construction | A builder selling a newly built home. No prior acquisition exists to count against the timeline. |
| HUD-Approved Nonprofit Sales | Properties sold by HUD-approved nonprofits in connection with affordable housing programs. |
| Federally Declared Disaster Areas | Properties in areas with a Presidential disaster declaration, where faster resales support community rebuilding. |
Don’t assume an exception applies without your lender confirming it. Each exemption requires documentation. A relocation sale needs an employer or agency paper trail. An inherited property needs a clear chain of title showing no purchase took place. The exemption doesn’t activate on its own. The lender has to verify and document it before the loan can move forward.
Buying a Flipped Home With an FHA Loan: Why the Contract Date Is What Counts
We worked with a buyer who found a renovated home and was ready to move forward using an FHA loan. What nobody caught early enough was that the property had been recently purchased by the seller. The 91–180 day window applied, and the transaction hit a wall.
The contract had to be cancelled and restarted. Not because the closing date was wrong, but because the original contract date put the buyer inside a restricted window. The FHA doesn’t look at when you close. It looks at when you and the seller signed the contract. That date is what determines whether the flip rules apply and which restrictions are in effect.
Cancelling and restarting a contract costs time, can affect rate locks, and puts unnecessary stress on a deal. The fix is simple: before you write any offer on a home that looks recently renovated, have your realtor or lender pull the seller’s deed recording date. That check takes minutes and prevents exactly this situation.
What This Means for Your Situation
Whether the 90-day rule blocks you outright or the 91–180 day window triggers a second appraisal, how much it matters depends on your financial profile. Buyers with tight down payment savings are most exposed if the second appraisal drops the loan amount. Buyers who qualify for conventional financing have a clearer path around the restriction. Knowing which situation you’re in before you write an offer is the right order of operations, not after.
Your Options When Timing Doesn’t Work
Finding out the home you want falls inside the FHA flip restriction doesn’t have to end the deal. You have three practical paths, and each comes with real trade-offs worth understanding before you choose one.
Wait Until Day 91
If the 90-day window is close to expiring, you may be able to delay signing the purchase contract by a few days or weeks. Some sellers will agree to this, especially when you’re the strongest offer. One critical detail: delaying the closing date won’t help. The contract execution date is what the FHA looks at. You cannot sign during the restricted window and then simply wait longer to close as a workaround.
Switch to a Different Loan Program
The FHA flip rule applies only to FHA-insured loans. Conventional loan requirements from Fannie Mae and Freddie Mac don’t include a 90-day flip restriction.
For veterans and active-duty service members, VA loan eligibility rules also don’t carry this restriction.
That said, switching programs isn’t always simple. FHA allows borrowers with credit scores as low as 580 to qualify with 3.5% down. Most conventional programs require a score around 620 or higher, and some lenders set their bar higher still. If your credit profile was the reason you chose FHA in the first place, a conventional loan may require more cash at closing or may not be available to you at all. A lender can walk through the full range of available loan programs to show you exactly where you stand before you make that call.
In Colorado Springs and the Denver suburbs, we’ve helped buyers pivot to conventional financing when an FHA timeline issue came up. The same situation plays out regularly in Florida markets, particularly around Tampa and Orlando, where flipped inventory moves fast and FHA buyers are common in lower price ranges.
Walk Away
Sometimes the timing doesn’t align, the alternative programs don’t fit, and the right answer is to find a different home. The FHA flip rule exists because buying at an inflated value carries real long-term risk. Passing on one home to protect yourself from overpaying is a reasonable outcome, not a failure.
Run the Numbers Before You Start Shopping
Our first-time buyer tools let you estimate your payment, check affordability based on your income, and compare loan options side by side — before you ever talk to a lender.
Open the First-Time Buyer ToolsCommon Mistakes to Avoid
Checking the Listing Date Instead of the Deed Recording Date
A freshly listed home isn’t necessarily a recently acquired one. The listing date tells you nothing about the seller’s ownership timeline. The only date that matters is when the deed was recorded with the county. We regularly see deals stall because nobody pulled that record until after the offer was accepted.
Assuming the 91-Day Mark Clears All Restrictions
Buyers who clear the 90-day window often assume the transaction is straightforward from that point. But if the price has more than doubled from the seller’s original purchase price, the second appraisal requirement is still in play through day 180. Buyers who plan around the first appraisal and don’t account for a second one can end up short on cash when the numbers shift.
Assuming Someone Else Checked the Dates
FHA flip rule compliance falls on the lender, but agents don’t always know to look for it, and sellers don’t typically volunteer their acquisition date. Ask your lender to verify the seller’s deed recording date before you write any offer on a recently renovated property. That check takes minutes. Catching the problem after an accepted offer takes weeks to unwind.
Questions to Ask Your Lender
- Can you pull the seller’s deed recording date before I write an offer on this property?
- If this property is in the 91–180 day window, what would trigger a second appraisal?
- If a second appraisal comes in more than 5% below the first, how does that change my loan amount?
- Do I qualify for a conventional or VA loan if FHA financing isn’t available for this property?
- Does this property fall into any exception category that would waive the flip restrictions?
- What documentation would you need from the seller to confirm an exception applies?
Find Out What Actually Drives Your Approval
Credit score is just one piece. Income, debt, assets, and loan type all factor in. Our approval guide breaks down what lenders actually look at and what you can do about it.
See What Affects Your ApprovalFrequently Asked Questions
It depends on how long the seller has owned the property. If the seller’s deed was recorded fewer than 90 days before you sign the purchase contract, FHA financing is not allowed. Between days 91 and 180, FHA financing is permitted but may require a second appraisal if the resale price is 100% or more above the seller’s original purchase price. After 180 days, standard FHA guidelines apply with no flip-related restrictions.
The clock starts on the date the seller’s deed was recorded with the county, not the date they closed or listed the property. Recording happens after closing, sometimes days later, so those dates are not always the same. The clock ends on the date you and the seller sign the purchase contract. Both dates need to come from official county records, not from what the agent or seller reports.
The second appraisal is required when the property is resold between days 91 and 180 and the new sale price is 100% or more above what the seller originally paid. The lender or seller covers the cost. The buyer cannot be charged. If the second appraisal comes in more than 5% below the first, the lender must use the lower value to calculate the loan amount, which can meaningfully reduce how much you can borrow.
No. The flip restriction is specific to FHA-insured loans. Conventional loans backed by Fannie Mae and Freddie Mac do not have a 90-day ownership restriction, and VA loans don’t carry this restriction either. If you qualify for one of those programs, the seller’s ownership timeline typically won’t affect your ability to purchase the property.
Yes. Properties exempt from the flip restrictions include HUD-owned REO homes, bank-owned and government REOs, inherited properties, homes sold through employer relocation programs, new construction, HUD-approved nonprofit sales, and properties in federally declared disaster areas. Each exception requires verification and documentation from the lender before the loan can proceed.
