No, it is not true. You can find articles and blogs all over the Internet that say the same thing. It is just a case of people being sloppy about how they describe a problem.
The Federal Housing Administration (FHA) insures a lot of home mortgage loans. This allows the loans to be sold on the secondary market, which gives the lender the money it needs to make more loans. The FHA was concerned about widespread fraudulent practices in which partners would flip properties to each other, over and over, artificially inflating the price each time. No real money changed hands until the very end, when some lender got stuck with a $500,000 loan on a $150,000 house, and the FHA had to pay off on the insurance.
To put the brakes on that type of activity, the FHA issued rules saying it would not insure any home loan for a property that had been purchased and then resold within a ninety-day period. Also, if the property had been bought and resold within a six-month period, and the price doubled, FHA would require two appraisals before it would insure the loan. This makes it more difficult even for legitimate real estate investors to flip properties in some circumstances. There is nothing illegal about flipping, though.