Using Conventional or FHA for flips

[Susan Capeta]

I'm trying to use a conventional or fha loan for a flip, but my loan officer says its not a good idea because i have to live in the house for a year or it is considered fraud.. is this true?

Also he says there is a prepayment penalty of $5k if i sell the house before 7 months which makes a $400k loan very expensive... $10k cost of loan + $2k per month for 8 months = $26k for the loan .. that is extremely expensive

Is 20% conventional loan or fha a bad idea to do a flip?