FHA Owner Occupancy Requirements - Less than One Year

[Derek Steinmetz]

In July, I moved into a 2 family that we purchased using FHA financing. We are now interested in moving to another area of town. I know you are supposed to owner occupy FHA properties for one year, but I am having a hard time finding details about that requirement, and the potential penalties for moving out a few months early. Does anyone know what the consequences of failing to owner occupy an FHA property for one year?

[Ralph E.]

@Derek Steinmetz FYI the following is straight from the 92900B that you will sign in an FHA purchase loan:

"Do not falsely certify that a property will be used for your primary residence when you are actually going to use it as a rental property"

"Penalties for Loan Fraud: Federal laws provide severe penalties for fraud, misrepresentation, or conspiracy to influence wrongly the issuance of mortgage insurance by HUD. You can be subject to a possible prison term and fine of up to $10,000 for providing false information. Additionally, you could be prohibited from obtaining a HUD-insured loan for an indefinite period."

AFFIDAVIT OF OCCUPANCY

Applicant(s) hereby certify and acknowledge that, upon taking title to the real property described above, their occupancy status will be as follows:

Primary Residence - Applicant(s)shall occupy, establish, and use the Property as Applicant(s) principal residence within 60 days after closing and shall continue to occupy the Property as Applicant(s) principal residence for at least one year after the date of occupancy, unless Lender otherwise agrees in writing, which consent shall not be unreasonably withheld, or unless extenuating circumstances exist which are beyond Borrower’s control.

That should clear some things up, good luck.