Articles Tagged With: FHA Occupancy Rules

April 11, 2014

FHA Loan Rules For Occupancy: A Reader Question

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 | more...

December 6, 2012

What You Need To Know About FHA Loan Occupancy Requirements

By Joe Wallace

When a borrower applies for a single-family home loan to be guaranteed by the FHA, there are some occupancy rules which must be followed. According to the FHA official site, single-family home loans are for occupants, not investors. Consider the rules as stated in HUD 4155.1 Chapter 4, which include a requirement that at least one borrower obligated on the mortgage loan use the property as his or her “principal residence”. What does that mean? According to Chapter 4, “A principal residence is a property that will be occupied by the borrower for the majority of the calendar year.” The rulebook also says, “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.” But | more...

August 9, 2012

FHA Vs. VA Loans: Occupancy

By Joe Wallace

While many eligible veteran borrowers choose the VA home loans program over the FHA loan program, others decide to pursue an FHA mortgage for their own reasons. In some cases, the borrower picks an FHA guaranteed mortgage over the VA loan program because they don’t have enough VA loan entitlement left to get a full VA guaranty. In other cases the borrower may simply prefer the FHA loan program for one reason or another. Borrowers who choose the FHA mortgage loan option learn there is a big difference in occupancy requirements. While VA loan rules state that only the borrower or the spouse of the borrower may live in the home to satisfy the occupancy rule, FHA loans state, “Military personnel are considered occupant-owners, and are eligible for maximum financing | more...