FHA mortgage stipulations

julie · Mar 8, 2009

I have another mortgage question on behalf of Mark.

He bought a house in December with an FHA mortgage. Now that he's missed about 2 weeks of work, and it looks like he'll miss next week too, he won't be able to pay his mortgage. He's a contractor for boeing and has no leave/sick/vacation time, it isn't given in his contract.

So I suggested to him that he rent it out and move back in with us for a while. We have an extra bedroom, and he spends most evenings and weekends at my house with the kids anyways.

He told me that he'd take me up on my offer, but he's scared that they will take the house away from him because with an FHA mortgage, it has to be your primary residence for 1 year.

So my questions are this...
1. Is that true? With an FHA mortgage do you really have to have it as your primary residence for a year?
2. If so, do you know if there are any circumstances that they will overlook (disability, out of work...)
3. In the big picture of things, are they really going to take his house away from him and foreclose on it, when their other option is to let him rent it out and he can continue paying his mortgage.

Thank you

julie · Mar 8, 2009

I have another mortgage question on behalf of Mark.

He bought a house in December with an FHA mortgage. Now that he's missed about 2 weeks of work, and it looks like he'll miss next week too, he won't be able to pay his mortgage. He's a contractor for boeing and has no leave/sick/vacation time, it isn't given in his contract.

So I suggested to him that he rent it out and move back in with us for a while. We have an extra bedroom, and he spends most evenings and weekends at my house with the kids anyways.

He told me that he'd take me up on my offer, but he's scared that they will take the house away from him because with an FHA mortgage, it has to be your primary residence for 1 year.

So my questions are this...
1. Is that true? With an FHA mortgage do you really have to have it as your primary residence for a year?
2. If so, do you know if there are any circumstances that they will overlook (disability, out of work...)
3. In the big picture of things, are they really going to take his house away from him and foreclose on it, when their other option is to let him rent it out and he can continue paying his mortgage.

Thank you

julie · Mar 8, 2009

I have another mortgage question on behalf of Mark.

He bought a house in December with an FHA mortgage. Now that he's missed about 2 weeks of work, and it looks like he'll miss next week too, he won't be able to pay his mortgage. He's a contractor for boeing and has no leave/sick/vacation time, it isn't given in his contract.

So I suggested to him that he rent it out and move back in with us for a while. We have an extra bedroom, and he spends most evenings and weekends at my house with the kids anyways.

He told me that he'd take me up on my offer, but he's scared that they will take the house away from him because with an FHA mortgage, it has to be your primary residence for 1 year.

So my questions are this...
1. Is that true? With an FHA mortgage do you really have to have it as your primary residence for a year?
2. If so, do you know if there are any circumstances that they will overlook (disability, out of work...)
3. In the big picture of things, are they really going to take his house away from him and foreclose on it, when their other option is to let him rent it out and he can continue paying his mortgage.

Thank you

julie · Mar 8, 2009

I have another mortgage question on behalf of Mark.

He bought a house in December with an FHA mortgage. Now that he's missed about 2 weeks of work, and it looks like he'll miss next week too, he won't be able to pay his mortgage. He's a contractor for boeing and has no leave/sick/vacation time, it isn't given in his contract.

So I suggested to him that he rent it out and move back in with us for a while. We have an extra bedroom, and he spends most evenings and weekends at my house with the kids anyways.

He told me that he'd take me up on my offer, but he's scared that they will take the house away from him because with an FHA mortgage, it has to be your primary residence for 1 year.

So my questions are this...
1. Is that true? With an FHA mortgage do you really have to have it as your primary residence for a year?
2. If so, do you know if there are any circumstances that they will overlook (disability, out of work...)
3. In the big picture of things, are they really going to take his house away from him and foreclose on it, when their other option is to let him rent it out and he can continue paying his mortgage.

Thank you

julie · Mar 8, 2009

I have another mortgage question on behalf of Mark.
 
 He bought a house in December with an FHA mortgage. Now that he's missed about 2 weeks of work, and it looks like he'll miss next week too, he won't be able to pay his mortgage. He's a contractor for boeing and has no leave/sick/vacation time, it isn't given in his contract.
 
 So I suggested to him that he rent it out and move back in with us for a while. We have an extra bedroom, and he spends most evenings and weekends at my house with the kids anyways.
 
 He told me that he'd take me up on my offer, but he's scared that they will take the house away from him because with an FHA mortgage, it has to be your primary residence for 1 year.
 
 So my questions are this...
 1. Is that true? With an FHA mortgage do you really have to have it as your primary residence for a year?
 2. If so, do you know if there are any circumstances that they will overlook (disability, out of work...)
 3. In the big picture of things, are they really going to take his house away from him and foreclose on it, when their other option is to let him rent it out and he can continue paying his mortgage.
 
 Thank you

just1more · Mar 8, 2009

Ok, I did some digging. I'm not an attorney but this is what I found on FHA loans:

You have to 'Intend' to occupy the home as your primary residence for 1 year. Everything I have found makes the word Intend to be the key. Mark bought it with the intention of living there; the FHA does allow an early sale due to mitigating circumstances. I didn't see any legal notes from the FHA on renting before 1 year. However, if you can sell with a good reason, he can rent IMHO.

The purpose of the rule is to prevent you from financing with an FHA if you intend to rent or sell. If you intend to live there and something happens, then....

Mark (or you on his behalf?) needs to get hold of the bank that holds his mortgage an let them know what is going on. They are the final say accoring to HUD on what he can do with the property and giving blessing for him to convert to a rental.

As for the BIG PICTURE, no I can't believe if the payments are being made anyone is going to go after the house. 1 in 8 homes in this country are in financial trouble; banks are losing billions; nobody is going to foreclose on a house making money. The exception being fraud; which is what it would be if Mark had bought with the INTENT to sell/rent within 1 year.

Hope this helps him,

just1more · Mar 8, 2009

Ok, I did some digging. I'm not an attorney but this is what I found on FHA loans:

You have to 'Intend' to occupy the home as your primary residence for 1 year. Everything I have found makes the word Intend to be the key. Mark bought it with the intention of living there; the FHA does allow an early sale due to mitigating circumstances. I didn't see any legal notes from the FHA on renting before 1 year. However, if you can sell with a good reason, he can rent IMHO.

The purpose of the rule is to prevent you from financing with an FHA if you intend to rent or sell. If you intend to live there and something happens, then....

Mark (or you on his behalf?) needs to get hold of the bank that holds his mortgage an let them know what is going on. They are the final say accoring to HUD on what he can do with the property and giving blessing for him to convert to a rental.

As for the BIG PICTURE, no I can't believe if the payments are being made anyone is going to go after the house. 1 in 8 homes in this country are in financial trouble; banks are losing billions; nobody is going to foreclose on a house making money. The exception being fraud; which is what it would be if Mark had bought with the INTENT to sell/rent within 1 year.

Hope this helps him,

just1more · Mar 8, 2009

Ok, I did some digging. I'm not an attorney but this is what I found on FHA loans:

You have to 'Intend' to occupy the home as your primary residence for 1 year. Everything I have found makes the word Intend to be the key. Mark bought it with the intention of living there; the FHA does allow an early sale due to mitigating circumstances. I didn't see any legal notes from the FHA on renting before 1 year. However, if you can sell with a good reason, he can rent IMHO.

The purpose of the rule is to prevent you from financing with an FHA if you intend to rent or sell. If you intend to live there and something happens, then....

Mark (or you on his behalf?) needs to get hold of the bank that holds his mortgage an let them know what is going on. They are the final say accoring to HUD on what he can do with the property and giving blessing for him to convert to a rental.

As for the BIG PICTURE, no I can't believe if the payments are being made anyone is going to go after the house. 1 in 8 homes in this country are in financial trouble; banks are losing billions; nobody is going to foreclose on a house making money. The exception being fraud; which is what it would be if Mark had bought with the INTENT to sell/rent within 1 year.

Hope this helps him,

just1more · Mar 8, 2009

Ok, I did some digging. I'm not an attorney but this is what I found on FHA loans:

You have to 'Intend' to occupy the home as your primary residence for 1 year. Everything I have found makes the word Intend to be the key. Mark bought it with the intention of living there; the FHA does allow an early sale due to mitigating circumstances. I didn't see any legal notes from the FHA on renting before 1 year. However, if you can sell with a good reason, he can rent IMHO.

The purpose of the rule is to prevent you from financing with an FHA if you intend to rent or sell. If you intend to live there and something happens, then....

Mark (or you on his behalf?) needs to get hold of the bank that holds his mortgage an let them know what is going on. They are the final say accoring to HUD on what he can do with the property and giving blessing for him to convert to a rental.

As for the BIG PICTURE, no I can't believe if the payments are being made anyone is going to go after the house. 1 in 8 homes in this country are in financial trouble; banks are losing billions; nobody is going to foreclose on a house making money. The exception being fraud; which is what it would be if Mark had bought with the INTENT to sell/rent within 1 year.

Hope this helps him,

just1more · Mar 8, 2009

Ok, I did some digging. I'm not an attorney but this is what I found on FHA loans:
 
 You have to 'Intend' to occupy the home as your primary residence for 1 year. Everything I have found makes the word Intend to be the key. Mark bought it with the intention of living there; the FHA does allow an early sale due to mitigating circumstances. I didn't see any legal notes from the FHA on renting before 1 year. However, if you can sell with a good reason, he can rent IMHO.
 
 The purpose of the rule is to prevent you from financing with an FHA if you intend to rent or sell. If you intend to live there and something happens, then....
 
 Mark (or you on his behalf?) needs to get hold of the bank that holds his mortgage an let them know what is going on. They are the final say accoring to HUD on what he can do with the property and giving blessing for him to convert to a rental.
 
 As for the BIG PICTURE, no I can't believe if the payments are being made anyone is going to go after the house. 1 in 8 homes in this country are in financial trouble; banks are losing billions; nobody is going to foreclose on a house making money. The exception being fraud; which is what it would be if Mark had bought with the INTENT to sell/rent within 1 year.
 
 Hope this helps him,

robert321 · Mar 8, 2009

i don't know much of anything about mortgages, not even sure i spelled it right, but if you are at risk of losing the house anyway what is it going to hurt to rent it out and take the chance of the mortgage company figuring out that you don't live there anymore, i konw of a case that the owner of a house has been decesed for 9 months and the mortgage company still hasn't figured out that the owner is dead. as long as the bill gets paid, especially with all the bad paper the banks have already, i don't think they will care/find out
but all this is just the 2 cents a highschool student has to offer.

robert321 · Mar 8, 2009

i don't know much of anything about mortgages, not even sure i spelled it right, but if you are at risk of losing the house anyway what is it going to hurt to rent it out and take the chance of the mortgage company figuring out that you don't live there anymore, i konw of a case that the owner of a house has been decesed for 9 months and the mortgage company still hasn't figured out that the owner is dead. as long as the bill gets paid, especially with all the bad paper the banks have already, i don't think they will care/find out
but all this is just the 2 cents a highschool student has to offer.

robert321 · Mar 8, 2009

i don't know much of anything about mortgages, not even sure i spelled it right, but if you are at risk of losing the house anyway what is it going to hurt to rent it out and take the chance of the mortgage company figuring out that you don't live there anymore, i konw of a case that the owner of a house has been decesed for 9 months and the mortgage company still hasn't figured out that the owner is dead. as long as the bill gets paid, especially with all the bad paper the banks have already, i don't think they will care/find out
but all this is just the 2 cents a highschool student has to offer.

robert321 · Mar 8, 2009

i don't know much of anything about mortgages, not even sure i spelled it right, but if you are at risk of losing the house anyway what is it going to hurt to rent it out and take the chance of the mortgage company figuring out that you don't live there anymore, i konw of a case that the owner of a house has been decesed for 9 months and the mortgage company still hasn't figured out that the owner is dead. as long as the bill gets paid, especially with all the bad paper the banks have already, i don't think they will care/find out
but all this is just the 2 cents a highschool student has to offer.

robert321 · Mar 8, 2009

i don't know much of anything about mortgages, not even sure i spelled it right, but if you are at risk of losing the house anyway what is it going to hurt to rent it out and take the chance of the mortgage company figuring out that you don't live there anymore, i konw of a case that the owner of a house has been decesed for 9 months and the mortgage company still hasn't figured out that the owner is dead. as long as the bill gets paid, especially with all the bad paper the banks have already, i don't think they will care/find out
 but all this is just the 2 cents a highschool student has to offer.

julie · Mar 9, 2009