FHA property flipping rule: 90 and 180 days

What the rule is for

The Handbook describes flipping as a practice where recently acquired property is resold for a considerable profit with an artificially inflated value. FHA insures the loan, so an inflated appraisal puts the insurance fund at risk and leaves the buyer with a mortgage larger than the home is worth. The rule, which tracks the regulation at 24 CFR 203.37a, is a time-based screen on the seller's holding period. It defines property flipping as the purchase and subsequent resale of a property in a short period of time.

The two dates that count

Two dates drive the test. The seller's date of acquisition is the date the seller acquired legal ownership. The resale date is the date all parties have executed the sales contract that will result in the FHA-insured mortgage for the resale. Notice that it is the contract date, not the closing date. A seller who bought on March 1 and signs a contract with the FHA buyer 90 days later is in the first bracket even if the closing is two months after that. The days between those two dates are counted by the Handbook's general rule that day one is the day after the starting date.

Bracket one: 90 days or fewer

If the resale happens 90 days or fewer after the seller's acquisition, the property is not eligible for an FHA-insured mortgage. There is no appraisal fix and no price threshold: the time restriction alone excludes it unless an exception applies. A buyer in that situation can wait until day 91, ask the seller to keep the property longer, or use another loan program.

Bracket two: 91 to 180 days

If the resale falls between day 91 and day 180, the answer depends on the price. When the resale price is 100 percent or more over the price the seller paid, in other words at least double, the lender must obtain a second appraisal from another appraiser. If the second appraisal comes in more than 5 percent lower than the first, the lower value is used as the property value in working out the adjusted value. The cost of the second appraisal may not be charged to the borrower. If the price has not doubled, no second appraisal is triggered. After 180 days there is no time restriction.

A worked example

A seller buys a house for $140,000 on May 1 and signs a contract with an FHA buyer on August 15, 106 days later, for $300,000. That is in the 91 to 180 day bracket, and $300,000 is a 114 percent increase over $140,000, so a second appraisal is needed. If the first appraisal says $295,000 and the second says $270,000, the second is more than 5 percent lower than the first (it is 8.5 percent lower), so $270,000 is the value used. Had the contract price been $270,000 (93 percent more), no second appraisal would be required. Try your own dates and prices in the checker.

Exceptions

The Handbook lists situations to which the time restrictions do not apply: property acquired by an employer or relocation agency in connection with an employee relocation; resales by HUD under its REO program; sales by other U.S. government agencies under their programs; sales by approved nonprofits of HUD-owned properties bought at a discount with resale restrictions; properties acquired by inheritance; sales by state and federally chartered financial institutions and government-sponsored enterprises; sales by state and local government agencies; and sales within presidentially declared major disaster areas, only on issuance of a notice of exception from HUD. A builder selling a newly built house, or building a house for a borrower planning FHA financing, is outside these restrictions too. The checker flags that exceptions exist but cannot know whether one applies.

Ownership documents the lender collects

Separately, a property must be bought from the owner of record, and the transaction may not involve a sale or assignment of the sales contract. The lender must document the seller's ownership, for example with a sales history report, the recorded deed or a tax bill, title commitment or binder showing the acquisition date. That ownership requirement applies to every FHA purchase regardless of how long ago the seller bought. For flips specifically, the lender must obtain a 12-month chain of title showing compliance with the time limits.

Practical notes

If you are a buyer, ask for the seller's acquisition date before you write the offer on a recently renovated home. If you are an investor, plan the holding period before listing for FHA buyers. For repair financing, an FHA 203(k) loan is a separate route that does not depend on the seller's holding period. Appraisal timing is covered on the appraisal validity page.

Sources

• HUD Handbook 4000.1, FHA Single Family Housing Policy Handbook, Update 18 PDF: Origination/Processing, Restrictions on Property Flipping and Seller Must Be Owner of Record, Handbook pp. 166-168 (heading General Mortgage Insurance Eligibility (11/10/2026)(06/27/2025)). Read November 2, 2026.
• HUD, Single Family Housing Policy Handbook 4000.1 information page. Read November 2, 2026.

Text read: HUD Handbook 4000.1, FHA Single Family Housing Policy Handbook, the clean Update 18 PDF that HUD links from its Handbook 4000.1 information page (HUD lists it as the August 12, 2026 update). Section headings carry their own effective dates, given above for this page. A heading with two dates, such as (11/10/2026)(06/27/2025), shows a revised date written over the prior one. Confirm current dollar limits and premium rates with an FHA-approved lender. This page paraphrases the Handbook and does not replace it. Page numbers cited are the Handbook's own and may be approximate; use the section headings to locate the text.