FHA Loan Owner Occupancy Rules

[Holly Yankus]

Hi, 

My husband and I bought a duplex in August of 2016 with an FHA loan. We had all intentions of living here for a year or more; however, we recently learned that we will be expecting another baby soon, and this place is too small to fit another child. We REALLY want to move before I am in the 3rd trimester because the stress of that is enough to deal with...we really don't need to be buying and moving with me about to pop! We plan to do a conventional loan for a bigger SFH. We started talking with our previous loan broker, and he said we should call our loan servicer, explain our situation, and ask for an exception. We did that today, and the underwriter we spoke with acted like it wouldn't be a big deal. Well, he called back shortly and told us "no deal". I'm so upset about this. We don't have room here for a baby, and I don't want to move so close to my due date and definitely not with an infant!! Is there anything we can do??

[Holly Yankus]

Hi everyone, 

I just wanted to update this thread for anyone that may run across it, having the same questions. We DID get written approval from our lender to move out of our home early! It took a lot of talking and getting to the right person that understood what we were asking for, but once we got there, the process was easy. At first everyone assumed we were asking them to do another FHA loan for us, and kept telling us no. After a lot of communication, I finally conveyed that we were just wanting the "written approval", per the security agreement, that we could move out of our home before our 12 month occupancy was met. Once we got that clear, it was just a simple written letter faxed in with a response received in about a week. We are now free to move before this baby is born, and I am one happy mama! Obviously, it is important to go into the process with the intention of living in the home for a year, but life does happen, and you are NOT stuck if you need an exemption. :-) The next home we buy will likely not end up being a rental due to the market in the area we want to live, but we do have 3 rental properties now, and I feel that is good for this set of newbies! Good luck everyone. Happy investing. Thank you to those that did give me good options and advice to help with my situation.