Living room ready for renovation with ladder

FHA Flipping Rule: What Should Home Buyers Know?

Explore your mortgage options

NMLS #3030

*Connect with a mortgage specialist

We teamed up with Rocket Mortgage to help you get house-hunting sooner. Answer a few questions and an agent will reach out to discuss your options.

Get Started by selecting an option below

What kind of loan are you interested in?

What to expect

Tell us what you need and a representative from Rocket Mortgage will give you a call. You’ll have support at every step.

What kind of property do you want to purchase? What kind of property do you own?

Why we’re asking

Rocket Mortgage® can provide a more accurate rate estimate if they know what kind of property you’re interested in.

NMLS #3030
How do you use your property? How would you use this property?

Why we’re asking

Having a little more information upfront helps Rocket Mortgage® provide a personalized rate faster.

NMLS #3030
When are you planning to buy?

Still House Hunting?

Hope you find your dream home soon! In the meantime, it’s never too early to know your rate.

NMLS #3030
Are you a first-time home buyer?

It’s all good:

Whether it’s your first – or second property – Rocket Mortgage® can provide you with a rate estimate.

NMLS #3030
Do you have a second mortgage?

It’s all good

If you have a second mortgage, it’s no problem. Letting us know helps to customize your rate.

NMLS #3030
What is your credit score?

Don’t know your score?

Don’t sweat it! Make your best guess. Credit scores range from 300 (low) to 850 (excellent).

NMLS #3030

Tell us a bit more about you

What happens next?

A representative from Rocket Mortgage® will be in touch to discuss your commitment-free, personalized rate. Then you can decide whether you’d like to lock it in!

NMLS #3030

Enter your contact info so Rocket Mortgage® can get in touch!

By providing your contact information and clicking the "Agree & Send Information" button below, you agree to our Terms of Use and Privacy Policy. You also expressly consent by electronic signature to receive telephonic sales, promotional, marketing and other calls and text messages, including any calls and messages sent by any automated system or other means for the selection or dialing of telephone numbers, or using an artificial or prerecorded voice message when a connection is completed, from Rocket Mortgage, its Family of Companies, our partner companies and our marketing partners at the telephone number you have provided, even if that telephone number is on a corporate, state, or national do-not-call list or registry. Your consent and agreement to receive such calls or text messages is not a condition of purchasing any property, goods or services from us, our Family of Companies or any of our partners.

NMLS #3030

When you’re searching for your next home, a fully renovated property can be pretty appealing. But if you want to use a Federal Housing Administration (FHA) loan to purchase a recently renovated property, you might run into some trouble getting your financing approved.

Even if you have excellent credit and enough cash for a sizable down payment, the FHA flipping rule can interfere with the approval of your FHA financing.

Whether you’re a buyer looking to purchase a renovated property or an investor looking to flip a house, you’ll want to familiarize yourself with the FHA flipping rule. We’re going to tell you what you need to know below.

FHA Flipping Guidelines

As a government-backed mortgage, it’s no surprise that an FHA loan comes with a lot of rules and restrictions. 

In addition to minimum credit scores and maximum debt-to-income (DTI) ratios, home buyers who want to get approved for FHA loans have to consider other requirements, like FHA flipping guidelines.

As a refresher, a flipped property is a home that’s bought and resold in a short period of time. Typically, house flippers are real estate investors who purchase a home that needs work. The investor will often repair the property and renovate it to increase the home’s value before selling and – hopefully for the investor – turning a profit.

So what are the FHA flipping guidelines? And how will they impact you if you’re trying to finance a home with an FHA loan?

FHA 90-Day Flip Rule

If you want to finance a flipped home with an FHA loan, your mortgage approval may be subject to the FHA’s 90-day flipping rule. The FHA flip rule prevents you from using an FHA mortgage to buy a home within 90 days of its last sale.[1]

In other words, an FHA loan requires the seller of a flipped home to own the property for at least 90 days before selling it to you.

If you try to buy a property that was sold within the last 90 days, FHA will deny your loan. 

To ensure borrowers don’t violate FHA guidelines, lenders rely on FHA appraisals to confirm the home hasn’t been sold in the past 90 days.

FHA Flip Rule for Sales Within 91 – 180 Days

There’s no outright rule against using an FHA loan to purchase a home that was sold within the past 91 – 180 days. However, there are certain qualifications you’ll have to meet if you want to buy a home that was sold 3 – 6 months ago.

If an owner is trying to resell a home to a buyer using an FHA loan during this time frame, FHA rules require lenders to order a second appraisal (by a different appraiser) if the purchase price is double or more than the price the seller paid when they bought the home.[1]

Let’s say you want to buy a $400,000 home using an FHA loan. The seller purchased the property for $200,000 4 months ago and made some upgrades to the home. 

The lender would have to get a second appraisal to support the increase in the property’s value. In addition, the lender can submit documentation of the renovations to justify the increased value, though a second appraisal is still required.[1]

For sales that occur more than 90 days but less than 12 months after the seller bought the home, the FHA might also require further documentation. Specifically, the FHA can seek an additional appraisal if the sales price is 5% or more than the home’s lowest sales price over the previous 12 months.[1]

Exceptions to FHA Flipping Rules

Though the FHA flipping rules apply most of the time, there are a few exceptions, including the resale of:

  • Properties owned by the U.S. Department of Housing and Urban Development (HUD), other government agencies and Government-Sponsored Enterprises (GSEs)[2]
  • Real estate owned (REO) properties[2]
  • Presidentially Declared Major Disaster Areas (PDMDA)[2]
  • Inherited properties[2]
  • Homes owned by nonprofit organizations[2]
  • Homes acquired by employers or relocation agencies (when working with an employee who’s relocating)[1]
  • New construction[1]

Other Loans for Flipped Homes

If FHA flipping rules are threatening your plans to purchase a new home, there are several other types of mortgage that don’t have the same requirements. Other loan options may include:

While each of these loan types has its own eligibility requirements you’ll have to meet, they aren’t subject to the FHA flipping rule.

See You on the Flip Side 

The FHA flipping rule isn’t something that applies to every home that’s purchased using an FHA loan. However, if you’re looking to buy a home that was recently renovated, you need to make sure your mortgage complies with the FHA flipping rule. Ready to take the next steps in buying a flipped home? Speak to a mortgage professional about an FHA preapproval.

Take the first step toward buying a home.

Get approved. See what you qualify for. Start house hunting.

The Short Version

  • The FHA 90-day flipping rule disqualifies FHA loans from being used to purchase a home that’s being resold within 90 days of its last purchase
  • Flipped homes that are being resold for a value that’s at least 100% higher than what the seller paid requires a second appraisal
  • Newly built homes, properties owned by nonprofit organizations and real estate-owned, HUD-owned and inherited properties are excluded from the FHA flipping rule
Back to top of page

  1. U.S. Department of Housing and Urban Development. “Mortgagee Letter 2003-07.” Retrieved December 2022 from https://www.hud.gov/sites/documents/DOC_35920.DOC#

  2. National Archives Federal Register. “Prohibition of Property Flipping in HUD’s Single Family Mortgage Insurance Programs; Additional Exceptions to Time Restriction on Sales.” Retrieved December 2022 from https://www.federalregister.gov/documents/2006/06/07/E6-8844/prohibition-of-property-flipping-in-huds-single-family-mortgage-insurance-programs-additional

You Should Also Check Out…

Our team of financial experts write, review and verify content for accuracy and clarity.