Buying a Flipped Downriver Home With FHA? The 90-Day Rule
What is FHA’s 90-day rule on flipped homes?
It’s a timing rule. FHA looks at how long the seller has owned the house before you agreed to buy it, and if that window is too short, the house can’t get an FHA-insured loan unless an exception applies.
The rule is in the federal regulations at 24 CFR 203.37a. It measures from two dates:
- When the seller got the house. The regulation uses the date the seller acquired the property, based on the date of settlement.
- When you signed. The “re-sale date” is the date of execution of the sales contract that will result in the FHA loan.
HUD’s FHA handbook, updated in August 2026, says it the same way in plainer words. The seller’s date of acquisition is the date the seller acquired legal ownership, and the resale date is the date all parties have executed the sales contract that will result in the FHA-insured loan.
Notice that second date. It’s the day the purchase agreement is signed. A closing date pushed out a month doesn’t move you across the line if the contract was signed too early.
If the re-sale date is 90 days or less after the seller acquired the property, the regulation says the property is not eligible for a mortgage insured by FHA, and HUD’s handbook says the same about resales 90 days or fewer after acquisition. Outside the listed exceptions, the rule turns on the calendar alone.
Honestly, the house can look finished and the listing photos can look great, and none of that changes the count.
What changes between day 91 and day 180?
After 90 days the house can qualify, but FHA may want more proof that the price is real.
The regulation and HUD’s handbook break it into windows:
| Time since the seller acquired it | What the rules say |
|---|---|
| 90 days or less | Not eligible for an FHA-insured mortgage, unless an exception applies |
| 91 to 180 days | Generally eligible, but a second appraisal by another appraiser is needed if the resale price is 100 percent or more over what the seller paid |
The second appraisal is the detail to watch in the 91 to 180 day window. If the investor bought at one price and the resale price is double that or more, your lender has to get an appraisal from a second appraiser. If that second appraisal comes in more than 5 percent lower than the first, the lower value is the one that counts for the loan. Ask your lender to run your numbers both ways before you sign, so a lower value doesn’t catch you off guard.
If the seller bought less than a year ago, ask your lender whether it needs anything more on value for your loan. Get that answer in writing early, before you pay for inspections.
If you’re comparing this with a renovation loan on a house that still needs work, our post on how an FHA 203(k) loan works on an older Downriver home covers that other path.
How do you check when the seller bought the house?
Ask for it, and then have it confirmed by someone who can see the records.
The regulation and HUD’s handbook put the documentation on your lender. Both say the lender must get documents verifying that the seller is the owner of record, and both list examples such as a property sales history report, a copy of the recorded deed from the seller, or other documents like a property tax bill, title commitment or binder. The regulation also says the lender must document that the sale meets the time limits.
You can ask about the same things before you write the offer. If you know the seller’s purchase date going in, you can talk with your lender about it before you’ve committed to anything.
That’s useful for you before you even make the offer:
- Ask the listing agent when the seller closed on the purchase. Ask for the date in writing.
- Ask who the owner of record is. FHA requires the home to be bought from the owner of record, with no sale or assignment of the sales contract. If the person selling to you may not be the owner of record, stop and call your lender, who has to verify it.
- Do a rough count to your contract date. Count from the seller’s purchase date to the day you’d sign, then have your lender confirm it. If it lands at 90 days or under and no exception applies, an FHA offer signed now won’t work.
- Compare the prices if you’re between 91 and 180 days. If the price is 100 percent or more over what the seller paid, plan for the second appraisal and the time it takes.
- Ask your lender before you sign. Have them confirm the dates and any appraisal requirement up front.
Ask your title company early what it can show you about when the seller took title. If the seller is an investor who bought the house at a sale, ask who the seller was, too. Some of the exceptions in the rule depend on who is selling, such as a bank, a government agency or HUD itself, so the name on the deed matters as much as the date.
What are your options if the dates don’t work?
You have a few, and none of them involves bending the rule.
- Wait. If you’re close to day 91, you and the seller may be able to hold off signing until the date passes. That’s a negotiation, and the seller may not want to wait. If you go this way, put the plan in writing with your agent so both sides know which day the contract will be signed, and have your lender confirm that date works before anyone signs.
- Change the loan type. This regulation is FHA’s. A different loan program has its own rules, so talk to your lender about what else you qualify for and what it costs you.
- Check for an exception. The regulation lists sales that the time limits don’t apply to, including homes the seller inherited, HUD’s resales of its own foreclosed homes, sales by state and federally chartered financial institutions and government-sponsored enterprises, and sales by state and local government agencies. Ask your lender to confirm whether one fits.
- Pick another house. If the dates and the exceptions don’t line up, another house may be the simplest route.
Whichever way you go, get the answer before you’re deep into inspections. A house that can’t get an FHA loan on your contract date, with no exception that fits, is a timing problem you can see coming. Two dates and one phone call to your lender can settle it, so make that call before you spend money on anything else.
If you’re new to all of this, the first-time buyer guide for Downriver and the page on Downriver financing and lenders walk through the bigger steps.
Does a redone house still need a home inspection?
Yes. The flipping rule is about dates and price. It doesn’t tell you anything about the wiring, the roof or what’s behind the new drywall.
Book your own inspection, and ask the seller for permits and receipts for the work. Ask what was replaced, who did the work and when. Write the answers down and hand the list to your inspector before the appointment, so they know where to spend their time. Those records also give you and your lender something concrete to look at if the price jumped after the work.
Our Downriver home inspection guide covers what to schedule and what to ask. Then go back to the dates: confirm the seller’s settlement date and your contract date with your lender before you sign anything.
Frequently asked questions
Does the rule apply if the seller inherited the house?
No. The regulation and HUD's handbook both list sales of properties the seller acquired by inheritance among the exceptions to the time limits. Ask your lender to confirm how it documents the inheritance.
Can an investor assign me the purchase contract instead?
Not with FHA. The regulation says the home must be bought from the owner of record and the transaction may not involve any sale or assignment of the sales contract. If the person selling to you isn't on the deed yet, talk with your lender before you go further.
What if the second appraisal comes in lower?
If the second appraisal supports a value more than 5 percent lower than the first, the regulation says the lower value is used to figure the maximum mortgage amount, and HUD's handbook says the lower value must be used as the property value. Ask your lender how that would change your down payment.
Does the rule apply to a HUD-owned home?
No. The regulation and HUD's handbook both list HUD's sales of its own foreclosed (REO) homes among the exceptions to the time limits. If you're looking at a HUD home, ask your lender how it documents that.
Sources
Ready to talk strategy? Call David Goad at 313-319-7688.
If you want to dig deeper into the local market, check out the Downriver MI Real Estate Guide. And if you want to get a better feel for who I am and how I work, here's the About David Goad — Downriver Realtor page. If you're comparing agents and trying to figure out who really knows this market, this page on the best Realtor in Downriver MI gives you more context too.
