If a seller is selling a house within what time period from the original purchase date, is the sale ineligible for FHA financing?

The correct answer is based on the Federal Housing Administration (FHA) guidelines, which stipulate that a property must be owned for at least 90 days before it is eligible for FHA financing. This rule is in place to prevent “flipping” practices, where properties are quickly bought and sold for a profit without substantial improvements. By enforcing this 90-day rule, the FHA aims to ensure that home buyers are purchasing homes that have a more stable market value and to mitigate the risk associated with rapid transactions.

Understanding this time frame is crucial for both buyers and real estate professionals, as it could affect the financing options available to buyers and help them avoid potential pitfalls associated with short ownership periods. Properties that are sold within 90 days of the original purchase date may raise concerns about the integrity of the sale and the true value of the property, which is why FHA financing would be ineligible in such cases.