FHA loan on leased property

[Christian Carson]

Hello all,

I'm looking to buy a 4-plex using an FHA loan and occupying one of the units myself. The problem is that the building is fully leased and it looks like I might not be able to get an open unit until April. Question is, what's the hard and fast rule on this? Will they ultimately deny me for the loan? If I decided to do cash-for-keys, how long would I have to do this?

I also have an income issue, since I just graduated from school in 2011. The loan officer told me "no problem, your history as a full-time student counts as a substitute for income history!" before sending me a preapproval letter. I find this to be quite odd. Have any of you heard of this happening?

[Townsend Derick]

Chris,

The rule about using your school time as employment is a true statement. I helped a young guy buy a home who was fresh out of high school and he was able to use his Junior and Senior year as employment history. He was currently holding a job in the Navy but it was only six months. FHA is owner occupant only as you know so it will come down to the underwriter about that issue. If he or she understands your situation then they may allow it. I would try to have the "cash for keys" already on paper between you and the tenant and then show that to the lender and see how they react.