FHA 90-Day Rule


UPDATE FOR JANUARY 1, 2015: If you read the article below, you’ll see that back in 2010, FHA waived the 90 Day Rule. But, as of January 1, 2015, the 90 Day Rule is back in effect. In other words, there is no longer a waiver and any resale to an FHA at this time will require the seller to have held the property for at least 90 days before resale.

The Old FHA 90-Day Rule

Before February 1, 2010, FHA had a very clear and very strict rule that basically said, “If you buy a property, you can’t resell it to an FHA buyer for at least 90 days after you purchase it.”

In fact, in some cases, you couldn’t even sign a contract with a buyer until after 90 days from purchase.

But, as of February 1, 2010, that restriction was waived, and FHA replace it with the following…

The Current FHA Rules

As of February 1, 2010, and at least through the end of 2012 (UPDATE: Now extended through end of 2014), FHA now allows investors to resell their properties as quickly as they want to FHA buyers. That said, there are some rules that FHA is putting in place for any quick resales. The two big ones for investors are as follows:

  1. All transactions must be arms-length, meaning that there must not appear to be any impropriety taking place between buyer and seller. This requirement also indicates that any prior flipping activity on the home in the previous 12 months may be a red flag to the lender.
  2. In cases where the investor wanted to sell within 180 days of purchase, and where the sale price exceeds the previous purchase price by more than 20%, the lender will be required to take extra steps to ensure the sale is legitimate. This may include a second appraisal and/or a full FHA inspection.

What This Currently Means in Real Life

Now that I clarified the FHA rules, let me explain how this translates into real life for rehabbers:

  • While FHA will allow quick resales (as soon as you want), not all banks that do FHA loans will do them in the first 90 days. In other words, some banks still adhere to the old FHA guidelines, even though FHA doesn’t require it. There are a lot of banks that will now do FHA loans immediately, so ask around to a couple loan officers or brokers and find a bank or two that will do an FHA loan without any time restriction; most of the regional banks will do these, but even big banks like Wells Fargo are now doing them. So, just because one or two banks say no, don’t give up.
  • If you plan to resell within 180 days, expect that you will need to have two appraisals on the property. Also note that the second appraisal can’t be paid for by the buyer — so either you (the seller) will need to pay for it, or the broker/lender will need to pay for it. This should be negotiated upfront so there are no surprises.
  • If you plan to resell within 180, expect that the lender’s underwriter will require you to furnish details of the rehab. This may include renovation details, invoices, receipts, etc — anything to substantiate the work you’ve done.
  • If you plan to resell within 180 days, you will need to do enough improvements to justify the higher resale price. There are no specific guidelines on how much work you must do, but if the appraiser or underwriter feels that you haven’t done enough work to justify the new resale value, your appraisal will likely come in low, regardless of comps.
  • If there has been a “pattern of flipping” (in this case, that means there has been more than one title change other than an actual foreclosure) in the past year, the lender will likely reject the loan and you may be required to wait 6-12 months to resell to an FHA buyer. This often occurs when an investor purchases from a wholesaler, rehabs and then plans on a quick resale — there are two title changes from the wholesaler to the flipper to the end-buyer, which will be a red-flag for an underwriter, so be aware of this potential issue when buying from wholesalers.

103 responses to “FHA 90-Day Rule”

  1. J Scott says:

    Hi Ruth,

    It depends on the terms of the short sale. Most banks require the short sale buyer to hold the property for some period of time — 30, 60, 90 or 120 days are most typical — before they can resell the property. You’ll want to ask the seller (the person who bought the short sale) what the terms of the sale were. They should know.

  2. This is the story……the realtor who had the short sale listing sold it to a person…who then backed out of it in 2 days. So the realtor stepped in and bought the house….paid cash for it. Then put it on the market . My daughter loved the house… and he took her offer.. he made a big profit. He wants the closing done in May, so that would be 60 days. This might be all legal…I would like to know. He was not my daughter’s realtor that showed her the house. This all took place in about 4 days. Thanks.

  3. J Scott says:

    Hey Ruth,

    This would only be legal if the agent disclosed to the bank that he was going to buy the short sale he was listing. If he purchased it in a business entity or trust and didn’t disclose his ownership of the buying entity, he committed fraud. You can ask him, but he’s unlikely to tell you if he defrauded the bank.

    Regardless, if your daughter doesn’t know about any of that, she should be safe.

  4. ESTEBAN says:


  5. J Scott says:


    If there are two appraisals, the lender will use the lower of the two. So, if the second one comes in lower than the first, the lender will use whatever the value was on the second one.

    If you wait 6 months and go to sell to another FHA buyer, they will do a new appraisal, and the lender will use the value from the new appraisal.

  6. John McDaniel says:

    Help! I am currently in escrow purchasing a new home. The property title was transferred on September 25, 2012 and our purchase contract was signed on March 19. When the title was transferred on September 25, the property was dirt. There was no home on it. The builder began construction after September 25. Now our lender is claiming this is a filpped property because the date of title transfer to the date of the signed pruchase contract is less than 180 days. Here’s my question, can new construction be considered a flipped property? As a result of this, the lender is requiring a second apprasial and raising our closing fees.

  7. Chris Zalupski says:

    No. New Construction is exempt from Property Flipping Guidelines, as the previous sales price was not based on the improved property with the home on it. FHA is very clear about this, but I’ve heard of lender’s making this mistake before.

    Exceptions to the 90 Day Flipping Guidelines
    The following exceptions to the 90 day flipping guidelines are still applicable and remain unchanged from previous guidelines:
    ? Builders selling a newly built home

    There are other exceptions, but this one is just about the easiest.

  8. J Scott says:

    Thanks for the info, Chris!!!

  9. Judy Xiong says:

    I put in an offer on a property that falls under the FHA 90-Day Rule and was not advised by my lender/loan officer that there would be 2 appraisals done on the property I was purchasing an, do I have any legal recourse since he didn’t advised me of the 2 appraisals being done regrdless if I asked for a 2nd one or not? This is what happend, I put in an offer on a property that the seller counter offer requesting that I used a specific loan officer to do my loan. I accpeted the counter and agreed to work with his requested loan officer. When the first appraisal came out about one week after the appraisal was requested, the appraied amount was our offer amount but with items that the property didn’t have. I disputed the appraised amount and the incorrect items listed for the property and my loan officer stated that we can ask for another appraisal on the property if I want which the seller will pay for. I agreed but then changed my mind afte speaking to my real estate agent about what might happen if the 2nd appraisal comes in at a lower amount. I advised the loan officer to cancelled the request for 2nd appraisal since I really wanted the property and only wanted to make sure that the items listed in the appraisal report was correct, the loan officer said not to worry about the amount and he can work with the seller regarding it if the 2nd appraisal came back at a lower amount so we proceed with the 2nd appraisal, which was supposely going to take another week before we received the report back. On 6/10/13, teh 2nd appraisal was emailed to me with an appraised amount of about $24k less than the 1st appraisal report that he sent to me. I reveiwed the report and found that the items listed in this report contained items that were in the property and they were the correct items such as the property having a swamp cooler for air conditioning and also noticed that the dates on both reports were one day apart from each. They were both requested prior to my request for 2nd appraisal and the lower appraisal report was signed and reported the day before the higher appraisal and way before 6/10/13. The seller refused to sell the property to me at the lower amount and when I confronted the loan officer about the dates on the appraised report, he stated that the reason why it took the lower appraisal report longer was because it had to go through auditing…now, I never heard of such thing before…Long story short, the seller will not sell the property at the lower amount and still till today’s date have not sent us the cancellation notice and it’s been 3 days already. Do I have any legal recourse on the seller and loan officer?

  10. J Scott says:

    Hi Judy,

    First, I’m not an attorney, so I can’t give legal advice. But, everything you’ve stated sounds about right to me. There do need to be two appraisals in this situation, and they are generally ordered pretty close together, and if an appraisal comes in low, it will generally spend several days in an auditing process by the lender. So, all that is reasonable.

    Unfortunately, you don’t have any recourse with the lender or the seller. While they should have told you the second appraisal was required, there’s no law that says they have to. The big issue is that the seller has to pay for that second appraisal, so hopefully they didn’t ask you to pay for it.

    The seller should keep in mind that they won’t be able to sell to an FHA buyer for above that low value for 6 months now, as that appraisal will stick with the property. Perhaps you can remind the seller/lender of that and see if they’re willing to negotiate at all?

  11. Aaron Garth says:


    I’m in town on vacation from Afghanistan and was wondering if I could meet with you for coffee or a meal on me to pick your brain a little. I’ve read your book and have ventured out on a few projects my self and would like the chance to set down and talk to you. I leave back out on the evening of July 8th. Your time would be appreciated. Thank you

  12. Chris P. says:

    I have a friend who has the cash to purchase my dream home at the county courthouse steps. I’m friends with the homeowner that went bankrupt. If my friend wins the auction for the foreclosed property, how long would a lender require me to wait until I can close on this house? Someone told me that the lender may want to wait a 6 month waiting period to confirm the seller (my friend) owns the property out-right. Does anyone know how this works in Georgia?? thanks in advanced!!!

  13. Diana R says:


    I’m under contract with a house that fall under this guidelines but now the seller came back and said that he won’t pay for the second appraisal. What can be done about it? Would this be a breach in contract?

  14. J Scott says:


    The Seller isn’t required to pay for the second appraisal, though you’re not allowed to pay for it (buyer is only allowed to pay for the first one). That said, you’d think the seller would want to in order to get the property sold. Perhaps your lender will pay for it (this is fairly common) or perhaps the seller’s agent will pay out of their commission?

  15. J Scott says:

    Hi Chris,

    6 months is typical for a lender to require a purchase to be “seasoned” before they do a refi. Some lenders require 1 year.

  16. Debi says:

    Do you know of any new FHA rule about flipping that would require a flipper to own a property 12 months before a buyer could purchase the home with an FHA loan? It has been several years since we have flipped, but are hearing this new rule went into effect in January 2014. We cannot find info anywhere.

  17. J Scott says:

    Hi Debi,

    This is most certainly not the case. For more information, see my post here:


    And note that this waiver has now been extended through December 31, 2014, so the same rules are in effect for at least this year as well:


  18. T. Sloan says:

    as a wholesaler how long do you have to hold on to the REO property before you sell it to your cash buyer??

  19. J Scott says:

    Hey T. Sloan,

    It will depend on who you’re buying the property from and in some cases, how much you’re selling it for. If you’re purchasing a FNMA Homepath property, you can resell immediately for less than 20% above your purchase price. More than 20% and you have to hold for 90 days. Some other REO sellers have restrictions as well — but they’re less common than the FNMA restriction.

  20. Carmen says:

    I have a question…. I’m the buyer. As a buyer i have to get an appraisal for the house i want to buy of $179K. The appraisal came back with a lower cost of $160K. Then my agent came to find out that the seller flips houses and seller put the house for sale before the 90 days. So now the seller needs to get an appraisal. The seller’s appraisal came back saying $179K. This makes a $19K difference. So the underwriters made an appeal for the the 1st appraisal in having such a large difference. How long can this appeal take or can it be resolved? Is there a such thing as having a 3rd appraisal?

  21. J La says:

    What happens on a flip where buyer is FHA and one (fha appraisal) comes in at value, but the 2nd supporting appraisal comes in short? Do they both go to fha since only one can be given an FHA case number?

    Can you go with a new buyer and use the FHA appraisal that came in at value and have the new buyer get the 2nd appraisal or do both go to FHA..

  22. J Scott says:

    J La,

    Both will get reported and saved as part of the FHA file. So, getting a new buyer won’t really help until 6 months has passed from the time of the appraisal.

  23. J Scott says:

    Hi Carmen,

    If the $179K value can be supported with comps, it’s possible that the first appraisal could be revised or overturned. The underwriter has a lot of say in what happens, so if the underwriter believes that the higher value is supported, there is a reasonable chance that the appraisal could be revised or a third appraisal could be ordered (though that is more likely).

  24. FHA’s can be definitely be a pain from the seller’s position. My first house flip went under contract more than 180 days after my initial purchase (closer to a year). The buyer’s bank still ordered a second appraisal even that long after the fact. You never know what you’ll run into.

  25. Rashad says:

    As a new investor I wanted to know how can I go about purchasing and flipping Fannie Mae homepath properties? Does it have to be my primary residence and do I have to stay in it for 12 months?

  26. J Scott says:


    Fannie Mae typically has a “First Look” period of 14 days (maybe 15?) where owner occupants get first stab at the property. If there are no accepted contracts in that period, then it opens up to investors to purchase. If you buy during the First Look period, you must live in the house for 1 year. If you buy after the First Look period, you do not need to reside in the house.

  27. Tyler says:

    Hi J,

    I noticed that you had previously updated the blog stating that the current rule will hold until the end of 2014. Does this rule still hold true for 2015?

    Thanks for the input.


  28. J Scott says:

    Hey Tyler,

    Actually the rule reverted back to pre-2010 rules as of December 31, 2014. So, you now must again wait 90 days for resale. I’ve updated the article:


    Thank you for pointing it out!

  29. Lawanda says:

    Hi J,
    Does the 90 period start on the date the home was sold or the date it was recorded by the city/state in their systems?

  30. J Scott says:


    According to HUD, the 90 days starts when the purchase closes (the settlement date). That said, some lenders will make their own rules on top of FHA rules (called “overlays”) and in some cases these overlays say things like, “The 90 days start at recording,” or “The resale contract can’t be signed until Day 91.” This is why it’s good to talk to your buyer’s lender before you sign a contract to make sure they don’t have any surprise overlays.

  31. Tiarra Trim says:

    Hi J, Me and my hubby are first time home buyers, after searching about 20 different homes we finally found one we BOTH loved, then when it came to make an offer my relator told me we wouldn’t be able to put in offer in until Sep because of this new rule, I find this strange because on the MLS listing it has FHA under the purchasing options. Do you think I should find another lender? I know if we wait 90 days the house we love will be long gone to another family. Any advice on how to get around this?

  32. J Scott says:

    Hi Tiarra,

    First, have you talked to your lender about getting a non-FHA loan? You can get a conventional loan for 3% down payment these days, so you should talk to your lender about a non-FHA option.

    If that doesn’t work for some reason, I would talk to the seller and see if you can convince him to wait until September to sell it to you. Offer full price, offer a non-refundable deposit, or do what you need to get the seller to agree. But, unfortunately, there is no way around this rule, and finding another lender won’t help — unless the new lender can help get you a non-FHA loan.

  33. Frank says:

    Hi, I put a contract on a house and had been approved for a FHA loan, my realtor told me the house was purchased less than 90 days ago and according to FHA we could not do that. The 90 day waiting period was up in less than 2 weeks, I told him we would wait until the time period was up, he told us that would not work because we were already assigned a case number to that house that would be attached to it for 6 months. Is this the case?? We have lost our dream house because our realtor did not inform us of this regulation and because we put a contract on it cant do anything for 6 months??? He told us we could do a conventional loan but would have to put more money down and the interest rate would be higher, do we have any recourse here??? Please help!!

  34. J Scott says:


    Go find a new lender who is familiar with FHA regulation. He should be able to cancel the existing FHA case number and then get a new one. It may take a week or two, but I’ve seen it done plenty of times.

  35. mark says:

    Does anyone no if there are profit limits on a flip when the buyer using Fha financing. I purchased a house for 60,000 put 15,000 into the property and have an offer on the table of 134,900. Will this be a problem with FHA financing? I understand 2 appraisals will be required. I think the property should appraise for selling price.


  36. J Scott says:


    If the property appraises, you should be okay. That said, if an appraiser sees that you recently purchased for $60K, didn’t put a lot into the rehab and are reselling for $135K, it’s possible that he’ll purposefully keep the appraisal from coming in. Unfortunately, I’ve seen that happen way too many times.

  37. mark says:

    Thanks for your input. I think it might be worth proceeding with the sale. I’m pretty confident the house should appraise, there are plenty of comps in the immediate area.

  38. Selena bailey says:

    I’m going through this now I just found out now today , I was only two weeks away from getting my dream home is there any thing I can do ?

  39. J Scott says:

    Hi Selena,

    I assume you’re trying to buy the home? If so, here are your two best options:

    – Talk to your lender about potentially getting a loan other than FHA
    – Talk to the seller about re-signing the contract after 90 days

  40. jason says:

    I was just told by my realtor that the property they accepted the offer for by me cant go under contract until the 91st day in order for usda loan, I cant find any info about buying a flipped house under the usda rules. I know the purchase price by the seller and just found out we would be buying it for more than the 20% over what they paid and they didn’t do that much repair to the property. I am really confused about all this.

  41. Maria A. says:

    So we were told that the appraisal report was being sent to under writer and we should be able to close in a few days, moments later we were told by lender that we would need to do another appraisal and loan file because loan was done too soon. Our friend flips homes for a living and he found one for us by chance (we have 8 kids). We are all disappointed and trying to see if there is a hail Mary pass available. Who should have caught the 90 day rule or us beginning the process before the rule was up affect our not affect considering we are closing way after the 90 days. Who then pays for the 2nd appraisal considering our friend is not making money on this offer and lender says seller should pay……Plus is there a hail Mary pass in all of this?

  42. J Scott says:

    Hey Maria,

    It was up to the lender to catch this. A good lender is familiar with all the rules that go along with the various types of loans, and this is a very common rule for FHA loans. He should have known about it and he should have verified that this wasn’t going to be an issue prior to the appraisal being done.

    Now, that said, if the flipper has much experience, he should have known about it too, and he should have let you know. All successful flipper I know are VERY familiar with this FHA rule (it affects a lot of deals), and the good ones are very proactive about letting the buyers (and their mortgage brokers) know about potential issues.

    So, I would say that this is the fault of the mortgage broker, and if the flipper does this for a living, it’s partially his fault as well. One or both of them should be paying for the next appraisal.

  43. Michael Mc says:

    J, maybe I am a little slow but I am a newby. Can you re-work this page and tell (a sentence or two) the pre-2010 at the top, 2010-2012 with a sentence, and then tell the story of the 90 rule as of 2015. As I read, I can’t tell what is now and what is then. I really care what is now in laymens terms. Thanks

  44. J Scott says:

    Hey Michael –

    Right now, the 90-Day Rule is in effect. If you purchase a house today, you will have to wait 90 days (91 actually) from today before you can sign a contract with an FHA buyer. If you sign the contract before the 90 days are up, FHA will likely kick the contract back and make you get a new one signed after day 90.

    Let me know if you have any questions!

  45. S Conrad says:

    We bought a house which closed on April 29. The asking price was 149,000, the appraisal came in at 144,000 and seller agreed to lower price and asked to move up the closing date. A week later, the lender called and asked if I would let an appraiser in to do 2nd appraisal as this was a flipped home. The second appraisal came in at 120,000! I wrote and reported this to consumer affairs and it was turned over to the FDIC. My bank has now decided to make my loan conventional. I also did not get the home inspection which was required for a flipped home and have spent over 5,000 in repairs that could have been caught. Do I have any legal recourse for this?

  46. J Scott says:

    Hi S Conrad,

    Unfortunately, I don’t believe there is any legal recourse. Your lender should have been familiar with the FHA rules for flipped houses, and should have explained to you that two appraisals were needed. In addition, your agent should have advised you to get an inspection (always get an inspection!) and should NOT have allowed you to spend any money on repairs until the closing had concluded and you legally owned the property.

    So sorry this happened to you. I would recommend finding a new agent and mortgage broker if it’s not too late…

  47. Peggy says:


  48. Peggy says:

    Need new rules for flipping. Can a person sell a home begore the 90 days if they are making less than 20% profit?

  49. J Scott says:

    Hi Peggy,

    There is currently no waiver in effect. If you flip a home to an FHA buyer, you will have to wait until day 91 to sign the contract.

  50. Abby says:

    Hey Scott! I just purchased a house in Greater Detroit Area in Michigan for flipping purposes, and I’m totally new at this. I’m looking at closing within 30 days, assuming inspection and appraisal comes thru without issues. My real estate agent told me that I’ve to keep the house for at least 6 months until I’ll be able to list it for sale, doesn’t matter if the buyer goes with conventional or fha. She said that no lender will lend to the buyer if I didn’t have possession for 6 months. Is that true?

Leave a Reply

Your email address will not be published. Required fields are marked *

Sign up for our Newsletter and get immediate access to our FREE 150+ Page eBook on New Construction, plus all of our business tools: Single-Family and Multi-Family Business Plans, Rehabbing and Buy-and-Hold Spreadsheets, Contract Templates, and more!
We respect your privacy. No Spam...EVER!