Is there an FHA rule that prohibits renting prior to closing

[Scott Shambre]

I am trying to purchase a property in Scottsville, Ky using an FHA loan. The previous owner passed away and we found out after we made an offer that there was going to be an issue in the courts concerning the estate and executor. This process could take a 4 weeks to a few months.

My question is this, if I am applying for a FHA loan, is there any FHA or HUD rule that states that I cannot move into the property and rent it until it finally closes. Both my agent and mortgage broker tell me that we CANNOT move into the home prior to closing.

This strikes me as odd because if I was currently renting the home and the owner decided to sell, under this FHA rule I would not blocked from purchase using an FHA loan because I am already occupying it.

VERY confusing and I need the help of those "in the know"

Thank you