FHA Flipping Rules

When a buyer is attempting to purchase a home using an FHA mortgage and that home was acquired by the seller in the past six months, there are a couple of FHA rules that you really need to know.

Resales Occurring 90 Days or Less Following Acquisition

If the date of the contract is 90 days or less after the most recent date of settlement on the seller’s purchase of that property, then the buyer will NOT be able to get an FHA loan on that property.

The confusing part of this rule is that the date of the new contract needs to be more than 90 days after the acquisition by the seller. The closing date is immaterial.

Also, the purchase price has no bearing on this rule.

Exceptions include the following:

· Sales by HUD of its Real Estate Owned
· Sales of properties that are acquired by the sellers by inheritance.

Resales Occurring Between 91 and 180 Days Following Acquisition

If the contract date is between 91 and 180 days following acquisition by the seller, the lender is required to obtain a second appraisal if the new purchase price is 100 percent or more over the price paid by the seller.

Again, the date of the contract is the important date here.