FHA OO mortgage - appraisal timing

[Jason A.]

Hi all, I am working to purchase a property and found that an OO FHA mortgage best suits my needs.

I have an accepted offer on a multi but have run into a snag … one of the tenants is delayed in moving out of the unit I’ll occupy. They’re very cooperative and working to secure a new place, but it could be another month.

In the meantime, everyone is getting restless as we’ve delayed the financing until a unit is vacant. It is a real pain (plus rates have shot up … oh well, my bad luck).

Anyway, my question is this: will OO financing be approved even if the units are occupied at the time of appraisal?

My lender suggested I simply have the tenants sign a letter stating they’re moving out by a particular date; others warned me that a fully occupied property will be rejected by the appraiser.

It would be so much easier if we could just move forward with financing in the meantime – appreciate any thoughts or feedback from firsthand experience.

PS – property is in Connecticut.

[Brie Schmidt]

Originally posted by @Jason A.:

Hi all, I am working to purchase a property and found that an OO FHA mortgage best suits my needs.

I have an accepted offer on a multi but have run into a snag … one of the tenants is delayed in moving out of the unit I’ll occupy. They’re very cooperative and working to secure a new place, but it could be another month.

In the meantime, everyone is getting restless as we’ve delayed the financing until a unit is vacant. It is a real pain (plus rates have shot up … oh well, my bad luck).

Anyway, my question is this: will OO financing be approved even if the units are occupied at the time of appraisal?

My lender suggested I simply have the tenants sign a letter stating they’re moving out by a particular date; others warned me that a fully occupied property will be rejected by the appraiser.

It would be so much easier if we could just move forward with financing in the meantime – appreciate any thoughts or feedback from firsthand experience.

PS – property is in Connecticut.

With FHA you have 60 days to occupy the property.

You can buy it occupied as long as one leases is MTM