April 11, 2014
A reader asks, “Nowhere does it say in the HUD document what the penalty is for not physically making your FHA home a primary residence within 60 days. What if it is 90 days or 120? What if you choose to renovate?”
This is something a borrower should discuss prior to the loan closing with the lender, or with a legal expert who may be able to give sound advice based on case law or years of experience. We can’t offer legal advice, but the one thing we can advise is that the borrower be as familiar as possible with the language of the loan agreement.
When it comes to renovations planned immediately after loan closing, you may have to make arrangements with the lender.
Does your FHA home loan require the borrower to be in compliance with FHA occupancy laws as a condition of loan approval? Does it declare the borrower to be in breach of contract if FHA occupancy rules are not followed? Furthermore, what are the penalties for being in breach of contract as stipulated in your loan agreement?
Knowing the answers to these questions could very well prevent you from landing in a situation where the full amount of a home loan has been declared due and payable, or other punitive actions.
We can’t say for sure what might happen in an individual borrower’s circumstances–you would need to read your loan contract to find out. But we can warn readers not to take FHA occupancy rules or other regulations lightly–there are reasons for these requirements and consequences if they aren’t followed as per your loan agreement.
Contact the FHA directly at 1-800-CALL FHA for further assistance on subjects like these or discuss the matter with a legal expert.
Do you have questions about FHA home loans? Ask us in the comments section.
Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for www.valoans.com for (8) years and is currently the Associate Editor for FHANewsblog.com.
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