hud's 90 resale rule aka property flipping rule

9 Replies

hello BP. So I ran into a situation. So I'm working on 1st flip. I bought a hud house that was on market for Almost a year. anyway it's almost 2 weeks til its done. I have a written offer for $1000 about the price I was going to list at. anyways the buyer is getting a fha loan so the lender said we had to wait 90 days because of the FHA flipping rule. I read about it on hud. I wanted to know anyway around this 90 day resale rule? the buyer is having a baby in august and wants a house before the baby due.. thanks in advanced

If their credit is good enough they can use a conventional loan instead of an FHA loan.

Originally posted by @Will Kirkendoll :

thanks for replying @Russell Brazil . would they then need to come up with a 20% down payment instead of 3.5%??

 You can go as low as 3% down with conventional.

They need to talk to their lender. Conventional requires around 680ish fico and a lower DTI.
No way around waiting 91 days to sign a contract with an fha buyer.

I want to say Fannie is 35/36% total DTI, with higher DTI up to 45ish with higher credit, only their lender will be the best source for Their specific situation.
BTW, this is all from memory, it's been a while and requirements change often. Most people going fha are doing it beacuse they don't qualify for conventional.

The anti flipping rule states that the buyer can not enter into a contract for a minimum of 91 days from the date the seller bought it. You cannot sell the property on the 91st day, only go under contract for sale

If they really want the property and are willing to go conventional but their lender isn't getting the job done, please encourage them to shop lenders! We have personally dealt with this situation several times and all lenders are not created equal. There are some really great ones that will get creative and help them figure out the financing. Good luck!