BIC TIP #1258: Not Until Day 91

Here is a common pitfall that trips up buyer agents, listing agents, and investors alike. If your buyer is using an FHA mortgage and the seller has owned the property for less than 90 days, you are going to have a problem. Stephen Long, who is both a broker-in-charge and a mortgage loan officer, explains why day 91 is the magic number.

The FHA 90-Day Rule in Plain English

FHA rules prohibit a buyer from getting an FHA-insured mortgage on a property that the seller has owned for less than 90 days. This rule is aimed at quick resales, the classic buy-it-and-flip-it scenario.

So if the current owner just acquired the property a few weeks ago, a buyer relying on FHA financing is going to have a hard time purchasing it. According to Stephen, FHA is very explicit: you cannot write a contract on that property in any capacity until day 91.

Who Gets Caught Off Guard

Investors who renovate and relist quickly are the most obvious group affected. If they list a freshly flipped home too soon, they may be shutting out a large pool of FHA buyers without realizing it.

Buyer agents get caught too. Their FHA buyer falls in love with a beautifully renovated home, they rush to write an offer, and only later discover the seller has not owned it long enough. That is a painful conversation nobody wants to have.

Check the Ownership Date Before You Write

The fix is simple diligence. Before writing an offer for an FHA buyer, check when the seller acquired the property. A quick look at the public record or a question to the listing agent can save everyone time and heartache.

Stephen notes that other loan products will not necessarily have this same restriction, so a buyer with a different financing option may not face the same hurdle. If your buyer has questions about which loan program fits, connect them with a mortgage loan officer early.

The Practical Takeaway

If the seller has owned the property for less than 90 days, an FHA buyer cannot move forward. Do not write the contract until day 91. Always verify the seller’s ownership date before writing an FHA offer, and talk with a mortgage loan officer about other financing options when the timing does not work.

This BIC Tip is general real estate education for licensees and consumers, not legal, tax, or financial advice. Rules and forms change, so verify current NCREC rules, MLS rules, and standard forms, and consult a North Carolina attorney or qualified professional about your specific situation. See Disclaimers & Disclosures.

Mortgage topics are discussed for general education only and are not a commitment to lend or an offer of credit. Stephen Long, NMLS #2795861, Keller Home Loans, a division of Mutual of Omaha Mortgage, Inc., NMLS ID 1025894. Equal Housing Opportunity.