FHA/203k loan must live in the house??

[Elliot Lamson]

Could i actually buy a place with a FHA loan and just rent it on AirBnB? how do they know you live there or not? I have heard in some of the podcast that you must stay for at least a year.....

[Dan Aylward]

Originally posted by @Upen Patel:

@Alex Dawson You can use a FHA loan to buy 1-4 unit residential property. If the property you are looking at is a true 2 unit (the main house and the studio) and is registered as such with the county, then you can live in the studio and rent out the main house. That is perfectly legal and will meet your FHA OO requirement.

Upen Patel, Mortgage Banker

Federal NMLS# 1374243

The FHA loan paperwork includes the "FHA Borrower's Contract with Respect to Hotel and Transient Use of Property", which forbids short-term rental of any part of the property (defined as less than 30-day rental period, OR including hotel-like amenities) during the life of the loan (not just the first year).  That effectively eliminates AirBNB as a legal option for anyone with an FHA loan.  That said, I have done a fairly thorough search of the Interwebs and have found no reference to anyone being penalized for this.  But it seems like it could be pretty easy for them to set up some sort of automated search of the AirBNB listings and match addresses to loans...