Re: FHA HOME LOAN, CAN THE OWNERS LEASE THIS PROPERTY? - Posted by Hugh James
Posted by Hugh James on June 16, 1999 at 20:28:17:
As they say, there’s good news and bad news…I’m a mortgage broker, and probably 70% of my business is FHA. Every FHA direct endorsement lender I’ve ever known is very clear about the terms–owner occupied only, one FHA loan to a customer. “Owner occupied” means you fully intend to occupy the premises as your personal residence for one year from the date of closing. Lawyers (especially new ones) occasionally like to roam off into long winded considerations as to “state of mind” and what constitutes and “emergency” but the reality is that HUD lenders have very deep pockets, and if they say you have a problem, well, you’ve got a problem. The reality is that borrowers do this all the time. They say they’ll occupy, and then don’t live up to the deal. It’s also true that, unless you’re in default, or close to it, you probably won’t ever be bothered. But, I sold my own house in March. The buyer took out a new FHA mortgage. Within 6 weeks every single person connected with that loan – broker, borrower, givers of gift money, etc. – had been contacted by phone or mail in what they now call a “quality control” audit. I hate to think what would have happened if the borrower didn’t live there, and the mail addressed to him was returned to HUD’s auditors “addressee unknown.” I guess you go with what you feel comfortable with.