Refi out of FHA house hack after moving states

[Michelle Bright]

We moved out of state last fall. Our first purchase and first house hack was a duplex in Northeast Indiana. We moved to Illinois right at the one year mark because my husband's job transferred us. We are renting in IL now and was wondering if we are required to refi out of our FHA loan. If not required is there a benefit to doing so?

We only put down 3% on a $67k purchase price and have not been making extra payments so there is no equity to pull out. I just want to make sure we are doing the right thing.

We had a lender tell us once before if one has to move because of a job transfer or some other reason outside of their control there is no penalty if the move occurs within the first year of the FHA. We have paperwork from his employer of course but is this a true statement I heard from this one lender?

Thanks BP!

[Kevin Romines]

@Michelle Bright Yes, it is true, if you are transferred because of employment it falls in the category of an unforeseen event and the lender will not require you to owner occupy the property to the 1 year requirement in cases such as these. 

If you are living more than 100 miles away from the previous property, you can keep the FHA mortgage on that property and then go get another FHA loan for an owner occupied home. The lending guideline is only for this very situation, so you are in a lucky position.

If the original property gains enough in equity to the point where you 20-25% equity, then at that point I would consider refinancing into a Fannie Mae loan without mortgage insurance, but I wouldn't consider doing that until you confident that you have the equity position. Until then, stay as you are.