FHA Loan Rules: What Buyers and Sellers Need to Know

July 2, 2025

If you're buying or selling a recently flipped home using an FHA loan, there are important rules you need to understand. The Federal Housing Administration (FHA) has strict guidelines when it comes to properties that have changed hands quickly — and they can impact both buyers and investors alike.

What Is Considered a Flip?

The FHA defines a "flip" as a home that has been bought and resold within a short time period — typically within 90 days. This could include homes purchased by investors, renovated quickly, and listed back on the market for resale.

FHA's 90-Day Rule

FHA loans will not insure mortgages for properties that are being sold within 90 days of the previous sale date. If a seller bought the home and is trying to resell it within that window, FHA financing cannot be used by the new buyer — no exceptions.

91 to 180 Days: Additional Restrictions

If a home is being sold between 91 and 180 days after the last recorded sale, the FHA may require:

  • A second appraisal, especially if the resale price is 100% or more above the original purchase price
  • Additional documentation to verify the value of improvements made

These rules are meant to protect buyers from overpaying and to reduce the risk of fraudulent transactions, but they can also delay or block certain purchases if not planned properly.

Advice for Buyers and Sellers

  • If you're a buyer using an FHA loan, always check the property's previous sale date before making an offer
  • Sellers and agents should disclose prior sale history and allow enough time to meet FHA guidelines
  • Real estate investors should be aware of resale timelines if they plan to sell to FHA buyers

Work With a Mortgage Partner Who Understands FHA Rules

At Kentuckiana Mortgage Group, we help clients across Kentucky and Indiana navigate the FHA loan process — including flip rule exceptions, appraisal timelines, and resale eligibility. Whether you're buying your first home or selling an investment property, we're here to make sure you stay compliant and confident.