May 16, 2015
A reader asks, “Is there a time requirement of the purchaser for moving into a recently purchased home with an FHA loan? Also, can the purchaser have family members move into the recently purchased home (FHA loan) instead of the purchaser?”
In general, FHA loan rules require the borrower to the an owner-occupier. FHA single family home loans are for principal residences only, so the borrower must certify that he or she is buying a home for personal use. Additionally there is an occupancy requirement–FHA loan rules state the borrower must move into the home and use it as the primary residence within two months of the loan closing date.
This information is found in HUD 4155.1, Chapter Four Section B, titled, “Eligibility Requirements for Principal Residences”. It begins by defining the FHA’s expectation of a principal residence:
“A principal residence is a property that will be occupied by the borrower for the majority of the calendar year”. The language of this section of the FHA loan rules is important to note–it says “the borrower” rather than a spouse or relatives.
In another portion of this section, we find the following:
“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 borrowers principal residence within 60 days of signing the security instrument, with continued occupancy for at least one year”.
So the position of the FHA on this reader question is clear–borrowers have sixty days from the loan closing date to personally occupy the home. Spouse occupancy of the home may or may not meet this requirement in community property states or where state law may otherwise dictate–it’s best to have a conversation with the lender about occupancy expectations if you aren’t sure what’s possible in your state.
Do you have questions about FHA home loans? Ask us in the comments section.
Bruce Reichstein has spent over three decades as an experienced FHA and VA home loan mortgage banker and underwriter where he was responsible for funding “Billions” in government backed mortgage loans. He is the Managing Editor for FHANewsblog.com where he educates homeowners on the specific guidelines for obtaining FHA guaranteed home loans.
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