April 11, 2014
In our last blog post, we answered a reader question about what might happen if the FHA loan applicant didn’t comply with FHA occupancy requirements spelled out for all new purchase single-family FHA home loans.
But what ARE those occupancy requirements? What should a borrower know about the FHA home loan requirements for occupancy before committing to the FHA mortgage?
The rules for occupancy when it comes to single-family FHA loans can be found in HUD 4155.1, Chapter Four under the heading, “Eligibility Requirements For Principal Residences”. Those requirements include the following definition of a principal residence:
“A principal residence is a property that will be occupied by the borrower for the majority of the calendar year.” Why is this definition so important? Because of the very next section in the FHA loan rulebook, which states:
“At least one borrower must occupy the property and sign the security instrument and the mortgage note in order for the property to be considered owner-occupied. FHA security instruments require a borrower to establish bona fide occupancy in a home as the borrower’s principal residence within 60 days of signing the security instrument, with continued occupancy for at least one year.”
That means that some kind of occupancy requirement language will be built into the contract for your FHA home loan. When you sign your loan agreement, you are making a legally binding agreement to follow the terms of that loan contract–including the occupancy language built into that contract–as described. Borrowers who need further assistance with occupancy issues should discuss the matter with the lender as soon as possible or contact the FHA directly for advice or assistance.
Do you have questions about FHA home loans? Ask us in the comments section. You can get information about applying or getting pre-approved for an FHA loan at FHA.com, a private company and not a government website.
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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