FHA 90 Day Rule

What is the FHA 90 day rule to buy and sell houses?

FHA is the Federal Housing Act. An FHA loan is a government-backed loan which adheres to government guidelines.

In short, the FHA 90 day rule states that once a property has been purchased and the deed has been changed from one owner to another it cannot change again for 90 Days if it’s being purchased with an FHA loan.

For example, if I purchased the house January first and you wanted to purchase the house February 1st since it’s only been 30 days you would not be able to use an FHA loan to purchase the property. You can still use conventional loans or cash but you cannot use an FHA loan until it has been owned for 90 days by the previous owner.

This does not mean that you have to wait to put a contract on the property till the 90 day mark but you cannot close before that 90 day mark has been reached.

Why does the 90 day rule matter?

Because this has to do with the Federal Housing Act it was intended to protect buyers and sellers any deals that are sketchy and from people getting abused by someone who engages in bad real estate practices.

This rule would prevent me from being able to buy a property and then immediately trying to sell it to you for a big mark-up.

Can I sell my house fast even if I didn’t own it for 90 days?

We’ve all seen signs for “sell my house” or “I buy houses” and things of that nature and those are completely ok and sometimes a great solution for people. The FHA 90 day rule applies to investors as well as homeowners who are not investors.

Usually you can sell your house quickly to investors since most investors don’t use FHA loans so the 90 days wouldn’t apply. Most pay cash for homes or they get private capital for the purchase of the home.

If I sell my house for cash and the buyers use FHA am I in trouble?

If someone tries to buy your house with an FHA loan it simply would not go through. The title company would catch it, or the lender since there is additional screening that has to get approved to use an FHA loan.

The thing you need to know when selling a property before 90 days is that you can’t accept an FHA loan. Conventional loans, cash, trades, all those are great options though.

Wrapping it Up

It’s pretty simple.

Less than 90 days, FHA bad.

More than 90 days, FHA good.

If you’ve been asking yourself, “how can I sell my house fast” then send us an email or give us a call and we can help you out.

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