Does owner still need to occupy home?
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Does owner still need to occupy home?
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Here are the FHA guidelines about occupancy: "FHA loan rules state the borrower applying for a new purchase single family residence must use that residence as the primary occupant or as the “primary residence”. If you want to buy a home, the FHA expects you to use it as YOUR home. Additionally, 'FHA will not insure a mortgage if it is determined that the transaction was designed to use FHA mortgage insurance as a vehicle for obtaining investment properties, even if the property to be insured will be the only one owned using FHA mortgage insurance.'"
The answer: Yes the owner needs to occupy a home under a FHA loan.
Terri - You generally can have the seller write a second hardship letter stating why and when they had to move out. For example, if someone had a medical illness and could not use the stairs to go to their bedroom, or a forced relocation, etc.
The Property per FHA PFS Guidelines cannot be rented for more the 18 months for the Servicer to approve the Borrower into the PFS w/o prior Approval from HUD.
http://portal.hud.gov/hudportal/documents/huddoc?id=nscpfsfaq.pdf
If the occupancy status comes into question though the Servicer will generally refer to HUD for a Variance Approval in order for the Homeowner to participate.
I've never seen HUD deny a Variance due to the occupancy status. Almost every single FHA PFS I have closed has not been occupied when the ATP was issued.
Terri,
If the borrower(s) have been out of the property for more than 18 months they can not participate in a Pre Foreclosure Sale. Also, HUD has regulations that if the property is vacant, it needs to continue to be maintained if pursuing a short sale.
Brett@ishortsalenow.com
www.ishortsalenow.com
310-564-6389
Can you please clarify a little more? Do you mean to be eligible for short sale?