Transitioning From Owner Occupied Rental to Full Rental

[Andrew Sprague]

Rookie Investor from MA looking to buy in May.

What is the process for buying a house through FHA and moving out to rent the property full time?

I know I’m required to live in it for 1 year etc. but when I move out does the loan structure change? Do I have to put cash in or realize value to get to the 25% equity threshold for an investment property? Should I refinance when I move out? If anyone has experience with this traditional house hack method please let me know.

[Jaron Walling]

@Andrew Sprague Your primary mortgage is set in stone once it closes. The only way it can change is if you refinance. If you were approved on rates and terms available for a mortgage on a primary, the lender can’t change the terms to higher investment property rates. 

Yes some people ReFi at that time and pull equity if that's the strategy. Locking a lower rate is ideal but not always possible. Depends on how you purchased the property and amount of value add.