FHA Loan for Multifamily

[Juan Rosado]

Do you think is wise to use an FHA Loan to buy a Single Family residence, live in it for 1 year, and then rent it afterward if it meats the 1% rule (or greater)?

[Andrew Postell]

@Juan Rosado this is complete fine. Keep in mind that when you buy a primary residence and then rent it the rent profit will not be the same as buying an investment property. Meaning, with an FHA loan you can use 3.5% down. Your loan will also have PMI attached to it. So if you were buying an investment property outright, and not living in it, your down payment minimum is now 15%. So your mortgage payment will be less.

Also, if you have one FHA loan, and need another FHA loan, you'll need to be moving outside of your commuting area or have another specific reason of needing another FHA loan again. So you might be limited to receiving a conventional loan on your next primary home. Which means 5% down minimums.

You can do exactly what you are describing but feel free to ask any additional questions that you might have.  Thanks!