Transactional Funding in a Double Close: FHA 90-Day Rule, TRID
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Quick Answer
As of November 10, 2026, the federal rule that matters most to a double close is not about the wholesaler at all: it is the FHA resale rule, 24 CFR 203.37a, which makes a property ineligible for an FHA-insured mortgage if the sales contract is signed 90 days or less after the seller acquired it, and which says the transaction “may not involve any sale or assignment of the sales contract.” A wholesaler who buys at closing A-B and resells the same day at closing B-C therefore cannot sell to an FHA buyer under the rule as written (our reading). From day 91 to day 180 the property is generally eligible, with a second appraisal required if the resale price is 100 percent over the purchase price. The wholesaler's own bridge loan, a transactional loan, is a business-purpose loan outside Regulation Z (12 CFR 1026.3(a)(1)) and Regulation X (12 CFR 1024.5(b)(2)); the end buyer's consumer mortgage is not, so that leg carries a Loan Estimate and Closing Disclosure. Two lenders publish their fee: 0.75% of the A-B price with a $1,000 minimum (Straightline Funding) and 1.0%, or 0.75% for a repeat deal in the same month, with a $1,000 minimum (Roth Capital). This is analysis of public documents, not investment, legal or tax advice.
Key Takeaways
- FHA, 24 CFR 203.37a(b)(2): a resale 90 days or less after the seller's acquisition is not eligible for an FHA-insured mortgage. The clock runs from the seller's settlement date to the date the buyer's contract is signed, so a same-day double close sits at day 0 (our reading).
- FHA, 203.37a(a)(1): the property must be bought from the owner of record, and the deal may not involve “any sale or assignment of the sales contract.” A double close puts the wholesaler on title first, which satisfies the owner-of-record part; the 90-day bar still applies.
- Exceptions in 203.37a(c) (eight, including inheritance, employer relocation, HUD and other agency REO, and sales by banks and government-sponsored enterprises) exempt the seller named in them. The eCFR text lists no amendment after June 7, 2006.
- Fannie Mae's Selling Guide, as we read topics B4-1.3-02 and B4-1.3-07, has no stated holding period. It asks the appraiser to say whether the seller is the owner of record, to report listings in the prior 12 months and a three-year sales history of the subject.
- TRID by leg: the transactional loan to the wholesaler is business-purpose and outside Regulation Z and X; the end buyer's mortgage must get a Loan Estimate within 3 business days of application and a Closing Disclosure 3 business days before consummation (12 CFR 1026.19(e) and (f)).
- Published pricing: Straightline Funding 0.75% of the A-B price up to $1,000,000, minimum $1,000, and 1.50% from $1,000,001 to $2,000,000; Roth Capital 1.0% standard and 0.75% repeat, minimum $1,000. Both say there are no upfront fees.
CSV · 40 rows
Transactional funding and double closings: FHA resale rule, Regulation Z and X, Fannie Mae appraisal fields and published fees, November 2026
40 rows: each paragraph of 24 CFR 203.37a, the Regulation Z and X provisions that decide which leg carries TRID disclosures, two Fannie Mae Selling Guide topics and two transactional lenders' published fees. Each row names its source.
What a transactional loan is, in the lenders' own words
In a double close the wholesaler signs two contracts: one to buy from the owner (the “A-B” contract) and one to sell to the end buyer (the “B-C” contract). The wholesaler takes title in the first closing and passes it in the second. Because the first deed has to be paid for before the second sale can fund, the wholesaler either brings the cash or borrows it for a few hours. Straightline Funding defines the borrowing like this: “Transactional Funding is a short-term loan provided to wholesalers who buy and re-sell a property the same day.”
That is a lender's description, not a rule. The rules sit in four places: the federal FHA regulation, the conventional-loan guidelines, the federal disclosure rules, and state law. This page reads the first three from the text and sends you to our state page for the fourth. If the deal is an assignment rather than a double close, the transactional loan does not come into it; the state laws we list in Wholesaling Real Estate Laws by State cover both structures, and that page notes that Oklahoma's definition of a wholesaler expressly includes a double closing.
FHA: the one federal rule that reaches the double close
An FHA-insured mortgage is the likeliest way for an owner-occupant with a small down payment to buy a wholesaled house, so the FHA resale rule decides whether a double close can be sold to that buyer at all. We read the current eCFR text of 24 CFR 203.37a (as of November 1, 2026).
| Provision | What the text says | What it means for a double close (our reading) |
|---|---|---|
| (a)(1) Owner of record | The property must be purchased from the owner of record, and “the transaction may not involve any sale or assignment of the sales contract.” | An assignment is out for an FHA buyer. A double close puts the wholesaler on title, which is what this paragraph asks for. |
| (a)(2) Proof | The lender must document ownership: a property sales history report, the recorded deed, a tax bill, a title commitment or a binder. | The B-C closing package needs a record of the A-B deed. |
| (b)(1) The clock | Runs from the date the seller acquired the property, based on the date of settlement, to the date the contract that results in the FHA mortgage is signed. | In a same-day double close the B-C contract is normally signed before or on the A-B settlement day, so the interval is zero or negative. |
| (b)(2) 90 days or less | The property “is not eligible for a mortgage to be insured by FHA.” | A same-day double close cannot be sold to an FHA buyer. |
| (b)(3) Day 91 to day 180 | Generally eligible. If the resale price is 100 percent over the purchase price, the lender needs another appraisal, or can document that the added value comes from rehabilitation. HUD may move the level within 50 to 150 percent by Federal Register notice. | A flip held past day 90 is allowed, with a second appraisal only on a large price jump. |
| (b)(4) Day 91 to month 12 | Eligible; HUD may require extra value documentation if the price is 5 percent or greater than the lowest sale price in the preceding 12 months, but only by Federal Register notice. | We did not look for a current notice; ask the FHA lender whether one is in force. |
| (b)(5) After 12 months | Eligible. | No time restriction. |
| (c) Exceptions | Eight, among them inheritance, employer or relocation-agency purchases, HUD and other agency REO, and sales by state- and federally-chartered financial institutions and government-sponsored enterprises. | They exempt the seller listed. A wholesaler who bought from a bank is not itself a bank; the exception covers the bank's own sale (our reading). |
| (d) Sanctions | Failure to comply “may result in HUD requesting indemnification of the mortgage loan.” | The risk falls on the FHA lender, which is why lenders screen for it. |
Source: 24 CFR 203.37a, eCFR text as of November 1, 2026. The last amendment shown in the source note is 71 FR 33142, June 7, 2006. The “our reading” column is ours; HUD Handbook 4000.1 may add detail we did not review.
Fannie Mae: no stated holding period, but the appraiser reports the seller's title
Conventional lending is different in kind. In the Selling Guide topics we read, there is no 90-day rule. What a double close meets instead are appraisal reporting fields. Topic B4-1.3-02 says the appraiser must “indicate if the property seller is the owner of record,” and that the appraisal forms require the appraiser to say whether the subject was offered for sale in the 12 months before the appraisal. Topic B4-1.3-07 says the forms require “the three year subject property and twelve month comparable sales history.” An A-B sale at one price and a B-C sale at a higher price a day later will therefore be visible to the appraiser and, through the appraisal, to the lender (our reading). Whether a given lender will lend on it is that lender's choice.
We could not read Freddie Mac's Seller/Servicer Guide (its site did not return text to our tools) or the VA Lenders Handbook, so we make no statement about either. Secondary sources we saw disagree about VA, and we did not rely on them.
TRID and Regulation X on each leg
| Leg | What it is | Disclosure rule | Source |
|---|---|---|---|
| A-B: the seller to the wholesaler, funded by the transactional loan | A loan to a business-purpose borrower, repaid at the B-C closing | Outside Regulation Z (“primarily for a business, commercial or agricultural purpose”) and outside RESPA and Regulation X, so no Loan Estimate or Closing Disclosure for that loan | 12 CFR 1026.3(a)(1); 12 CFR 1024.5(b)(2) |
| B-C: the wholesaler to the end buyer, financed by a consumer mortgage | A consumer mortgage secured by real property | Loan Estimate within the third business day after application and not later than the seventh business day before consummation; Closing Disclosure received no later than three business days before consummation | 12 CFR 1026.19(e)(1)(iii), (f)(1)(ii)(A) |
| B-C: the wholesaler as seller | The seller side of that mortgage | The settlement agent gives the seller the seller-side disclosures in 12 CFR 1026.38 no later than the day of consummation | 12 CFR 1026.19(f)(4) |
| B-C: end buyer paying cash | No consumer mortgage | The disclosure rules above attach to the mortgage, so a cash sale has none under these sections (our reading) | 12 CFR 1026.19(e)(1)(i) |
Source: eCFR text as of November 1, 2026. Whether the A-B loan is business-purpose is a fact question about the borrower's purpose; Regulation X lets a person rely on Regulation Z's definition (12 CFR 1024.5(b)(2)).
What this means in practice (our reading): the end buyer's three-business-day Closing Disclosure waiting period is a timing fact the wholesaler cannot compress. A B-C closing date fixed before the end buyer's lender has delivered the disclosures can slip, and the A-B closing is tied to it by the same-day funding. Straightline also says both closings must happen at the same title company or settlement office; that is a lender term, not a rule.
What a published fee looks like, and a worked example
We found no neutral rate sheet. Two lenders print their fee on their own pages, which we saved on November 10, 2026. Both are marketing pages and both can change.
| Lender | Fee | Minimum | Base and other terms |
|---|---|---|---|
| Straightline Funding | 0.75% up to $1,000,000; 1.50% from $1,000,001 to $2,000,000 | $1,000 | Fee is based on the A-B purchase price; no upfront fees; no credit check; maximum funding $2,000,000; both closings at the same title or settlement office |
| Roth Capital | 1.0% standard (first funded deal each month); 0.75% for each additional deal in the same calendar month | $1,000 | No upfront fees; the fee comes from proceeds at closing; deals over $500k are priced case by case |
Source: the two lenders' public pages, saved November 10, 2026.
Worked example (our arithmetic). A wholesaler contracts to buy at $150,000 (A-B) and to sell at $178,000 (B-C). The gross spread is $178,000 minus $150,000, or $28,000.
- Straightline's 0.75% of $150,000 is $1,125, above its $1,000 minimum. Spread after that fee: $28,000 minus $1,125, or $26,875.
- Roth's 1.0% of $150,000 is $1,500, or $1,125 at the repeat 0.75% rate. Spread after the fee: $26,500 or $26,875.
- Title, recording, transfer taxes and the B-C seller costs sit on top; we publish no figure for them because we found no public schedule that applies in every state.
- FHA test: a B-C buyer using an FHA loan fails the 90-day test, because the B-C contract is normally signed at day 0 or earlier. The price jump is $28,000 on $150,000, or 18.7%, far below the 100 percent trigger of the day 91 to 180 band; that band only matters if the wholesaler holds the house past day 90.
The example is arithmetic on published percentages, not a quote or an expected result.
What a reader can do with this
- Ask the end buyer's lender first which loan type is involved. FHA is closed to a same-day resale under 203.37a(b)(2); conventional lenders may accept it or add their own rules.
- Put the B-C closing date behind the buyer's disclosures. Ask for the Closing Disclosure date and count three business days.
- Get the fee in writing on the A-B price, and ask whether the minimum, the tier break at $1,000,000 and any extension fee apply.
- Check your state on our wholesaling page before signing, since double closing is not a way around every state statute.
- If you plan to hold the house past day 90 and renovate, a flip loan is a different product from a same-day bridge. Compare lenders in our guides to fix-and-flip loans and house flipping.
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FAQ
Frequently Asked Questions
Sources, read and saved on November 10, 2026: 24 CFR 203.37a, 12 CFR 1026.3, 12 CFR 1026.19 and 12 CFR 1024.5 (eCFR versioner text as of November 1, 2026); Fannie Mae Selling Guide topics B4-1.3-02 and B4-1.3-07; the public transactional funding pages of Straightline Funding and Roth Capital. We did not read HUD Handbook 4000.1, the Freddie Mac Seller/Servicer Guide, the VA Lenders Handbook or title insurers' underwriting manuals. Fees on lender pages can change. This is analysis of public documents, not investment, legal or tax advice.
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