{"id":4157,"date":"2024-11-07T14:06:10","date_gmt":"2024-11-07T19:06:10","guid":{"rendered":"https:\/\/tomo.com\/blog\/?p=4157"},"modified":"2025-02-10T12:00:23","modified_gmt":"2025-02-10T17:00:23","slug":"the-fha-flip-rule-what-you-should-know","status":"publish","type":"post","link":"https:\/\/tomo.com\/blog\/the-fha-flip-rule-what-you-should-know\/","title":{"rendered":"The FHA flip rule: what you should know"},"content":{"rendered":"\n<p class=\"has-small-font-size\">So, you\u2019re jumping into the world of <a href=\"https:\/\/tomo.com\/mortgage\/rates?utm_source=tomo_blog\" title=\"FHA loans\">FHA loans<\/a> or thinking about <a href=\"https:\/\/tomo.com\/blog\/best-cities-for-flipping-houses\/\" title=\"flipping houses?\">flipping houses?<\/a> One thing you need to get familiar with is the FHA flip rule\u2014it\u2019s there to keep buyers safe from shady flipping practices.\u00a0<\/p>\n\n\n\n<p><\/p>\n\n\n\n<h3 class=\"wp-block-heading\">What\u2019s the deal with the FHA flip rule?<\/h3>\n\n\n\n<p><\/p>\n\n\n\n<p>Imagine this: An investor buys a rundown house for $150,000, throws on some fresh paint, replaces a few fixtures, and a month later, it\u2019s on the market for $300,000. Looks great, right? But here\u2019s the catch: the cosmetic upgrades might be hiding major issues like bad wiring or foundation cracks.<\/p>\n\n\n\n<p><\/p>\n\n\n\n<p>If a first-time buyer uses an <a href=\"https:\/\/tomo.com\/blog\/is-an-fha-loan-a-good-idea\/\" title=\"FHA\">FHA<\/a> loan to snag this house, they might overlook those deeper problems because they\u2019re wowed by the shiny new upgrades. The FHA flip rule steps in to protect that buyer. It requires that properties be held for at least 90 days before they can be sold to an FHA buyer, making sure that the seller isn&#8217;t rushing to flip the house and artificially inflate the price.<\/p>\n\n\n\n<p><\/p>\n\n\n\n<p>This rule is basically the \u201cslow down and check\u201d rule. It\u2019s designed to give both buyers and<a href=\"https:\/\/tomo.com\/blog\/who-does-what-in-a-mortgage-company-understanding-your-lending-team\/\" title=\" lenders\"> lenders<\/a> time to verify the home\u2019s real value, beyond just the quick fixes. Without it, the buyer could end up overpaying for a property that looks good on the surface but has big problems underneath.<\/p>\n\n\n\n<p><\/p>\n\n\n\n<h3 class=\"wp-block-heading\">How does the rule work? <\/h3>\n\n\n\n<p><\/p>\n\n\n\n<p>Here\u2019s how it breaks down:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>90-Day Rule<\/strong>: If you\u2019re buying a home with an FHA loan, the seller must have owned the property for at least 90 days before you can even sign a contract. This isn\u2019t just a random rule; it\u2019s a protection to keep you from getting stuck with an overpriced, quickly-flipped home.<\/li>\n\n\n\n<li><strong>Why This Rule Exists<\/strong>: The rule stops sellers from flipping homes too fast and jacking up the price without doing the real work. It helps protect you from hidden issues that could turn into expensive problems after you move in.<\/li>\n\n\n\n<li><strong>91-180 Day Rules<\/strong>: If the seller has owned the house for between 91 and 180 days, and they\u2019re trying to double the original price, extra <a href=\"https:\/\/tomo.com\/blog\/what-is-a-home-appraisal-and-how-much-does-it-really-cost\/\" title=\"appraisal \">appraisal <\/a>requirements kick in. This ensures that any big price jumps are actually justified by improvements made\u2014not just a fancy facelift to boost the price.<\/li>\n<\/ul>\n\n\n\n<p><\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Are there any exceptions for the 90 day FHA flip rule? <\/h3>\n\n\n\n<p><\/p>\n\n\n\n<p>Yup, there are some exceptions to the FHA flip rule. You might be off the hook for the 90-day wait if the property falls under one of these categories:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Newly built homes<\/strong><\/li>\n\n\n\n<li><strong>Properties owned by nonprofits or the government<\/strong><\/li>\n\n\n\n<li><strong>Inherited homes<\/strong><\/li>\n\n\n\n<li><strong>Relocation sales<\/strong><\/li>\n\n\n\n<li><strong>Homes in disaster zones<\/strong><\/li>\n<\/ul>\n\n\n\n<p>So, if you\u2019re eyeing a house in one of these categories, you could skip the 90-day rule altogether.<\/p>\n\n\n\n<p><\/p>\n\n\n\n<div class=\"wp-block-buttons is-layout-flex wp-block-buttons-is-layout-flex\">\n<div class=\"wp-block-button\"><a class=\"wp-block-button__link wp-element-button\" href=\"https:\/\/tomo.com\/mortgage\/rates?utm_source=tomo_blog\">See today&#8217;s rates<\/a><\/div>\n<\/div>\n\n\n\n<p><\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Your timing is everything <\/h3>\n\n\n\n<p><\/p>\n\n\n\n<p>Keep in mind, the 90 days start ticking from when the seller bought the house, not from when they listed it. This means you need to pay attention to when the seller actually took ownership of the property. If you\u2019re interested in a house that\u2019s been recently flipped, your lender will check this timeline to make sure everything is legit.<\/p>\n\n\n\n<p><\/p>\n\n\n\n<h3 class=\"wp-block-heading\">What about appraisals?<\/h3>\n\n\n\n<p><\/p>\n\n\n\n<p>If the price of a flipped home jumps significantly\u2014say, the seller bought it for $150,000 and is trying to sell it for $300,000 within a few months\u2014there might be additional appraisal requirements. This helps make sure the new price is fair and not just a quick cash grab by the seller.<\/p>\n\n\n\n<p><\/p>\n\n\n\n<h3 class=\"wp-block-heading\">FHA\u2019s impact on investors<\/h3>\n\n\n\n<p><\/p>\n\n\n\n<p>The FHA flip rule slows down investors who are trying to turn a fast profit by flipping houses. It makes sure the housing market stays accessible to <a href=\"https:\/\/tomo.com\/blog\/ready-to-buy-your-first-home-heres-how-to-do-it-2\/\" title=\"first-time homebuyers\">first-time homebuyers<\/a> and people using FHA loans to buy a primary residence. By keeping flippers in check, it keeps home prices a little more stable and gives regular buyers a fair shot at getting into the market.<\/p>\n\n\n\n<p><\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Can I buy a flipped house with a conventional loan? <\/h3>\n\n\n\n<p><\/p>\n\n\n\n<p>If you\u2019re using a <a href=\"https:\/\/tomo.com\/blog\/what-are-fha-loans-and-conventional-loans\/\" title=\"conventional loan\">conventional loan<\/a>, you\u2019re not tied down by the FHA flip rule. You can buy a flipped home even if it hasn\u2019t been owned for 90 days. But don\u2019t get too excited just yet\u2014some conventional lenders have their own rules about flipping, so it\u2019s always smart to check with your lender about any specific guidelines.<\/p>\n\n\n\n<p><\/p>\n\n\n\n<h3 class=\"wp-block-heading\">So?<\/h3>\n\n\n\n<p><\/p>\n\n\n\n<p>The FHA flip rule isn\u2019t just a hassle\u2014it\u2019s there to protect you from buying a flipped house that\u2019s had more cosmetic surgery than real repairs. It slows down the process to give both buyers and lenders time to verify that the home\u2019s new price makes sense and isn\u2019t just jacked up for a quick profit. Sure, it might mean waiting a bit longer, but in the long run, it\u2019s worth it to avoid getting stuck with a house full of hidden problems.<\/p>\n\n\n\n<p><\/p>\n\n\n\n<div class=\"wp-block-buttons is-layout-flex wp-block-buttons-is-layout-flex\">\n<div class=\"wp-block-button\"><a class=\"wp-block-button__link wp-element-button\" href=\"https:\/\/tomo.com\/mortgage\/affordability?utm_source=tomo_blog\">How much home can I afford?<\/a><\/div>\n<\/div>\n\n\n\n<p><\/p>\n\n\n\n<p><\/p>\n\n\n<div style=\"padding-top:var(--wp--preset--spacing--30);padding-bottom:var(--wp--preset--spacing--30);padding-left:var(--wp--preset--spacing--30);padding-right:var(--wp--preset--spacing--30);margin-top:var(--wp--preset--spacing--30);margin-bottom:var(--wp--preset--spacing--30);margin-left:0;margin-right:0;\" class=\"has-link-color wp-elements-c54b177fd5d2f341f8967a20726f2ac0 wp-block-post-author has-text-color has-contrast-color has-background has-tertiary-background-color has-large-font-size\"><div class=\"wp-block-post-author__content\"><p class=\"wp-block-post-author__name\"><a href=\"https:\/\/tomo.com\/blog\/author\/clairegtomonetworks-com\/\" target=\"_self\">Claire Gallaudet<\/a><\/p><p class=\"wp-block-post-author__bio\">Claire is a Mortgage Analyst at Tomo, where she explores the data and trends shaping the housing market. She is especially interested in how economic forces impact homebuyers. A Seattle native, she now lives in Austin, where she balances analysis and communications with teaching yoga and walks around the lake with her dog.<\/p><\/div><\/div>\n\n\n<p>If you&#8217;re ready to start your journey to homeownership, <a href=\"https:\/\/tomo.com\/mortgage\/app\/preapproval?utm_source=tomo_blog\" title=\"\">get pre approved with Tomo Mortgage today.<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>So, you\u2019re jumping into the world of FHA loans or thinking about flipping houses? One thing you need to get familiar with is the FHA flip rule\u2014it\u2019s there to keep buyers safe from shady flipping practices.\u00a0 What\u2019s the deal with the FHA flip rule? Imagine this: An investor buys a rundown house for $150,000, throws [&hellip;]<\/p>\n","protected":false},"author":31,"featured_media":4201,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"","fifu_image_alt":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[38,287],"tags":[],"class_list":["post-4157","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-mortgage-dictionary","category-real-estate-investing"],"aioseo_notices":[],"jetpack_featured_media_url":"https:\/\/tomo.com\/blog\/wp-content\/uploads\/2024\/11\/fha-flip-jpg.webp","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/tomo.com\/blog\/wp-json\/wp\/v2\/posts\/4157","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/tomo.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/tomo.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/tomo.com\/blog\/wp-json\/wp\/v2\/users\/31"}],"replies":[{"embeddable":true,"href":"https:\/\/tomo.com\/blog\/wp-json\/wp\/v2\/comments?post=4157"}],"version-history":[{"count":1,"href":"https:\/\/tomo.com\/blog\/wp-json\/wp\/v2\/posts\/4157\/revisions"}],"predecessor-version":[{"id":4158,"href":"https:\/\/tomo.com\/blog\/wp-json\/wp\/v2\/posts\/4157\/revisions\/4158"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/tomo.com\/blog\/wp-json\/wp\/v2\/media\/4201"}],"wp:attachment":[{"href":"https:\/\/tomo.com\/blog\/wp-json\/wp\/v2\/media?parent=4157"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/tomo.com\/blog\/wp-json\/wp\/v2\/categories?post=4157"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/tomo.com\/blog\/wp-json\/wp\/v2\/tags?post=4157"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}