If you assume a loan does it have to be a primary residence?

[Bradley Buxton]

If you assume a VA or FHA loan is it required to be a primary residence? Has anyone actually assumed a loan for a SFR rental?

[Wyatt Wolff]

Quote from @Bradley Buxton:

Quote from @Account Closed:

Quote from @Bradley Buxton:

If you assume a VA or FHA loan is it required to be a primary residence? Has anyone actually assumed a loan for a SFR rental?

If you "assume" a loan, that is a term used by the industry that says you are going through the qualification process just as though you are the original borrower. So, you need to meet the requirements stated for the original loan and they will ask you if you will comply. Do not lie to them. It is bad form (and lying is illegal.)

However, if you take the property "Subject To", that is a different animal and does not limit you to those requirements at all. 
(and it's not illegal)

This is called Subject To, it is what I do. So, if I can provide further clarification, I'd be happy to help. 

I called the servicer of the loan and spoke with 6 different people in 3 different departments. No one had a clear answer. Some of the qualifications are the same but not all. For example for a VA assumable loan the assumer does not have to be a veteran. From what I have gathered as long as you are not falsely stating it's your primary residence and the loan servicer does not require it to be a primary you don't have to make it a primary. Basically it seems like the decision comes down to the loan officer.

 Not certain an LO has the juice to make that decision... I would at least ask a branch manager, and I would ask for it in writing. I have heard of people doing it, I just do not know the details of how. I would imagine that as long as you are not stating it is your primary, and as long as you are not materially lying on anything, you should be okay.