Buying & Selling Real Estate Discussion

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John O'Brien
  • Rental Property Investor
  • NJ
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Using FHA Loan Without Living At Property

John O'Brien
  • Rental Property Investor
  • NJ
Posted Jan 20 2022, 09:24

Looking at buying a 4-unit in NJ and considering using an FHA loan to decrease down payment money needed (would be 3.5%-5% down in this case). All 4 units are currently occupied with paying, long-term tenants. I don't particular want/need to live there, especially not right away. What are the rules around occupying a property purchased with an FHA loan in this scenario? More importantly, what is the actual enforcement of those rules? Do I need to immediately start the eviction process with one of the tenants, or is there a time period by which I need to occupy a unit? I can't imagine they would be encouraging/forcing you to evict current tenants. And if I don't evict, and the tenants stay for a full year, is the "must occupy for 1 year" rule fulfilled, even though I technically have never lived there? Looking to see what the likelihood is that I can use the FHA without actually living at the property. Plan is to eventually re-finance into a conventional loan. Thanks!

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