FHA loan while living with parents?

Question

Theoretically speaking...If I were to purchase a two-unit property with an FHA loan and only rented out 1 of the units for the first year but didn't live in the second because I was able to live with my parents would there be a legal problem with that? Do I actually need to be present in one of the units for the full year to get the loan with no problems?

Dan Barli · Answer

Yes, to qualify for an FHA loan, you have to live in the property as your owner occupied residence. You will sign documents and affidavits that you are swearing to that you will live there. I have had clients come to me because they got "caught" by the FHA after they didn't actually live in the property. It was not a pleasant experience for anyone involved. I would figure out a way to get another type of loan and put a little more money down but ensure that you are doing it correctly so you don't have to cross the line with any legalities.

Dan Bryskin · Answer

@Anthony Marucci. You are going to be signing an owner occupant affidavit, stating you are going to occupy the property for 12 months. If you won't you risk to run afoul of the FHA. To the best of my knowledge they don't catch people often, but if they do, you may face a penalty. However have heard of people switching their driver license over, locking one of the bedrooms up, throwing some stuff in it and claiming they are occupying the place. Another issue - if you renting a room or two in the place you are living, do you need a rental license in your locality? Also, are you doing to provide tenants with the certificate of rent paid for the unit you are living in?

Good luck