Owner-occupied 203k Multifamily

[Sieanna Ariel]

If one is to go about real estate using a FHA loan specifically the 203k for rehab and purchasing, what will cover the owner-occupied expenses the first year?

What happens during the one year period of occupying a multi-family? Would one need a hard money lender or private lender for that first year or would they be paying for the first year to pay down the mortgage, closing costs, rehab etc. out of pocket?

I am confused about how a mortgage would be covered for such a property with multiple units, being covered without tenants that first year. How is rehab suppose to take place over the first year if it is a fixer upper property that is completely ragedy and do they expect one ro live in a place needing structural or non-structural repairs for the first year? Does the property have to be owner-occupied for one year before even applying for the loan ?

[Nicole Heasley Beitenman]

@Sienna Ariel Ask your lender. I believe there are guidelines in place for homes that cannot be occupied by the owner due to hazardous conditions.

Theoretically, the costs of ownership in the first year (and subsequent years) are covered by renting out the spare units. If those cannot be rented out because of the condition, you may have to cover the costs out of pocket until the units are in a habitable condition. Again, this is a question for your lender.

I'm not sure what you mean by occupying before applying for the loan. Unless there's some extenuating circumstances like you're buying a property from your current landlord or a friend/family member, you can't occupy it before buying it.