House Hacking FHA Loan

[Arshiya Taami]

I've been living with my parents and I am planning on getting an FHA Loan to purchase my first home. I want to house hack and rent all of the rooms out (since with an FHA Loan I have to be a primary resident I cannot rent the whole house out). But I don't want to be living with strangers, I was thinking if I make my own room(something small like in the garage). and only sleep/be at the house half of the time will I still be considered a primary resident and will that be okay with FHA guidelines as long as I don't tell them?

[Jason Wray]

One thing to keep in mind is "less is more" when it comes to telling anyone including the Loan officer what you plan to do in terms of living arrangements. Reason why I mention this is FHA has a guide line that requires the primary owner to live in the "Main" house or occupy the larger GLA. What you do after you buy the house and which room or area you occupy is your decision at that time.

If you mention to the Bank/lender that you plan on living in the basement for example or an ADU they can deny the loan. The best way to do it is if you can manage to live in the home for (6) months you can refinance it into an investment property if the LTV is at least 85%. That can happen if you buy a home that needs a little TLC or renovations and after the upgrade the new ARV might put you at that 85% LTV or lower, possibly even be able to take cash out.

As a first time home owner you can use FHA 3.5% down or Fannie Mae 3% down (single family). I would consider looking for a 2-4 unit so you can at least occupy (1) unit and collect rent on the other unit(s) and at the 6 month mark evaluate your LTV and situation. FHA 3.5% for 2-4 Unit and Fannie Mae 5% down.