FHA Owner Occupied Requirements

[Alexander N.]

Looking for some insight here..

I'm currently looking for a 2plex-4plex in a few different markets and am circling back to the idea of FHA owner occupied.

I just want to understand the specifics here. My understanding is that you just have to have the INTENTION of living within the residency for 6 months. For example, I buy a 3plex with FHA, and rehab takes 6 months. Can I immediately rent it out after that? Although I never lived in it, can I claim intent during that rehab process?

Not sure how fine the lines are, and am not trying to get myself in trouble, just trying to get a bit creative - any insight is appreciated. 

Thanks!

[Chris Mason]

Putting intention in all caps like that shows that you don't intend to do it at all. That's fraud. You've got to move in within 60 days and owner occupy for 12 months following that. 

Paragraph 6 of the standard deed of trust has an out for unforeseen circumstances, but talking/thinking/writing/etc about it months ahead of time makes it pretty clear that "unforeseen" does not describe this scenario. The classic example of legit "unforeseen" is that your mom who lives 3 states away comes down with terminal brain cancer and you want to be near her for her final months. "I want to profit" is not an example of "unforeseen."

Don't play with fire. FHA loans present an amazing leverage opportunity as-is, no need to get fancy or break the rules. Good luck.