How long until I need to move in with an FHA loan?

Question

I am looking at 2-4 unit properties that are currently tenant occupied, and would be using an FHA loan to purchase. I know that I must be an owner-occupier to qualify for the FHA loan, but how long after purchase would I need to move in? For example, if I made an offer in February and closed in March, could I move-in by September?

If anyone has any experience with this, please share....

Sam McClellan · Answer

Kristine Marie Poe I'm not talking about a specific place... just shopping and noticing most of the places that look interesting are tenant occupied. most likely wouldn't be an REO

Sam McClellan · Answer

Thank you

Kristine Marie Poe

so if I can't get a tenant to move by 60 days, what would happen? Would I be penalized or is an extension granted? I'm sure someone has had this problem after buying a place that was already occupied.

Ralph E. · Answer

@Sam McClellan I've seen it happen once in 28 years with a VA purchase I did several years ago.  But out of all the purchases that are done.....there are random inspections you don't want to be caught out of compliance.  I can see if you make your payments very month with a check from a different address it might raise a red flag....also if it's units that might automatically trigger an inspection or follow up.  Most of time as long as you make your payments on time you might be OK.

Evan R. · Answer

Regarding eviction control in Oakland, CA, an owner can justly evict a tenant and occupy the unit provided that owner lives in the unit for a minimum of three years. There are other requirement as well, but the important one is the three year minimum.

This webpage does a good job explaining Oakland's specific eviction control laws when it comes to moving into a development.

Account Closed · Answer

Assuming at least one of the tenants doesn't fall under any of the termination exemptions, you may be able to negotiate the purchase contract to include a vacant unit upon closing.  An agent can help you write such an offer.  There are lots of overpriced 4-plexes out there with poor cash flow. You may be able to make a better offer than many investors because your cash flow needs may be different because you will live in the one of the units.

Sam McClellan · Answer

thanks @Ralph E. have you seen this happen before?

Ralph E. · Answer

@Sam McClellan legally per your NOTE they can call the loan due and payable.

Account Closed · Answer

Many will be tenant occupied because transfer to a new buyer is not necessarily an allowable cause for termination of tenancy/eviction in Oakland.  I really want to suggest you get as well informed as possible on what's required to get a unit vacant for use as your primary residence.  I also suggest enlisting the help of a good buyer's agent.  Doesn't cost you anything and they can be invaluable in helping you make an offer that will get accepted.

Account Closed · Answer

I wonder too.  All California tenants that have been in place longer than 1 year get 60 days notice (not 30), so you'll likely need at least 60 days unless the seller is vacating the unit for you. Who is the owner?  Is it an REO?

James Wise · Answer

Pretty sure it's 60 days to move in & and you must stay 12 months.