1031 exchange as an FHA buyer

[Nathan Muirhead]

I am under contract to purchase a duplex via FHA financing with an agreed upon closing date of today (7/13). Friday (7/10) my lender contacted me because the seller is attempting a last minute 1031 exchange which may push the closing date back a few days (no big deal). Today we were notified that as part of the 1031 exchange the buyer transferred the deed of the property into another entity (I admittedly am not well versed in the 1031 exchange process and am not sure if this is typical). As I'm sure many reading this are aware of (it was news to me), there are regulations against selling a property via FHA prior to 90 days of ownership. Due to the last minute deed transfer, that clock has been re-started as of Friday. I'm being told there really is no way around this regulation, and the seller would like to move forward but now we would have to wait 90 days to close. Has anyone experienced a similar situation? Do I have any legal recourse?

I’m relatively new to investing (this would be my 2nd duplex) and any advice/feedback is greatly appreciated.