Buying a SFR with FHA and Renting

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Buying a SFR with FHA and Renting

Nicholas Thompson
Austin, TX · Member since 2014 · 9 posts · 0 votes

I have talked to a few lenders and real estate agents and they have all advised people that it was OK to buy a property with an FHA loan and rent right away. I know legally it is not OK, but everyone has heard stories that there wouldn't be an issue, assuming payments made each month and on time.

What are your thoughts on that in reality? Is it acceptable? Has anyone done it before?

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  • Wayne Brooks
    Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
    12y

    Loan fraud. Have at it!

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  • Brie SchmidtBusiness Member
    Moderator
    Real Estate Broker · Chicago, IL · Member since 2013 · 6k+ posts · 5k+ votes
    12y

    Yea, it is mortgage fraud. I am told they randomly run address and utility checks during the first year to make sure you live there

    A conviction for a single count of a federal mortgage fraud can result in a fine of up to $1 million. State fines can range from a few thousand dollars for a misdemeanor convictions to $100,000 or more for felony convictions.

    Podcast Guest on Show #132
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  • Robert Leonard
    Investor · Lafayette/Baton Rouge, LA · Member since 2013 · 1k+ posts · 915 votes
    12y

    Bank fraud is only a federal offense. You can choose to be a cheat and easily verifiable liar, if you are okay with that. As long as a lot of other people are doing it, its okay right? <sarcasm>

    You are the only one who has to look at yourself in the mirror every morning.

    Search for this topic. It comes up all the time.

    Something Dave Ramsey talks about in his training is what characteristics he found consistently amongst wealthy people he studied - personal integrity was number one. Does that help you understand what you are considering?

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  • Nicholas Thompson
    OP
    Austin, TX · Member since 2014 · 9 posts · 0 votes
    12y

    To be clear, I am not considering doing this.

    I have to imagine though that any young investor may consider it. Just wanted to start another discussion on the topic.

    Appreciate all the feedback!

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