FHA Occupancy Requirements

[Matthew Pivach]

Hey everyone! I've got a FHA loan question. I'm looking at submitting an offer on a duplex. My goal is to live in one side and rent the other out. Currently, both sides of the duplex are occupied, and I would not be able to move into the duplex until October (6 months from now) because that's when one of the tenant's leases expires. (The other tenant's lease doesn't expire until 18 months from now).

My question is in regards to FHA occupancy requirements.  I'm really interested in obtaining a FHA loan, but I've read that the borrower must occupy the property within 6o days of the loan being issued.  So, I was wondering if there were any exceptions to this rule given that I'm not able to take possession of the premises due to the leases currently in place.  I'd obviously move in as soon as one of the current tenants leave, but that will be past the 60 days I've read about.   

Hopefully that makes sense!  Any feedback would be awesome.  

[Kevin Romines]

You are correct, you must be owner occupied within 60 days of the loan funding. The seller should have given the person with the least amount of time left on their lease, an eviction notice due to selling the property. 

You need to put it back on them. The seller may have to incentivize the tenant to get them to agree to vacate early. Otherwise you will be in violation of the contract terms with the lender and FHA. The only other option is to extend out the closing to be with 60 days of when that lease expires?

I hope this helps?