Rental Property Investor · Clementon. NJ · Member since 2019 · 116 posts · 25 votes
Hey guys,
I'm househacking in New Jersey. I was refinancing my loan out of an FHA into a conventional when the loan officer and I were discussing the rates and all. Then, I asked him, what my chances of applying for an FHA after would be. He then proceeded to tell me he can't then apply me for a conventional loan, it must be for an investment property, and can they can potentially call my loan note due if i don't use it as a primary home. I am staying there currently, but then can I not move out at all without turning into an investment type loan? Rates are much higher and I may not be able to refinance then. I don't want to do anything illegal or anything to put me at risk of the loan note being called due. What should I do/ how are other people getting loans for their second property?
Lender · Schaumburg, IL · Member since 2015 · 833 posts · 774 votes
5y
@Shivam Patel it's very simple. Any loan for a primary residence...whether it be a purchase or refinance, whether it's Conventional, FHA, or VA...you will be signing a legal document at closing called a Mortgage, that states you are going to occupy for 1 year.
If you are looking to refi from FHA to a new primary residence Conventional loan, that starts the 1 year clock over again.
If you are intending to not live there for another year, and you did the refi as a primary residence, you are committing mortgage fraud.
Your lender is doing his job and letting you know the law.