I am considering buying a beach house with a USDA loan and living in it for a year. Can I rent it out after I live in it for year (or less)? I am finding conflicting information online.
Banker · Nationwide · Member since 2020 · 2k+ posts · 1k+ votes
3y
Katheryn,
First why USDA and second have you searched the property address on the USDA Property Eligibility Map to see if it qualifies? I ask because USDA is generally for Rural areas and lower income borrowers. Why not just buy the Beach house under a portfolio investment program that only requires 15% down. Here is the actual USDA guideline that answers that question directly form USDA:
Borrower's that secure a United States Department of Agriculture (USDA) guaranteed loan have certified on the loan application and Form RD 3555-21 that they will occupy the property as their primary residence. However, life circumstances can intervene and the borrower may have to relocate due to a growing family, job change, etc. The borrower is not required under 7 CFR 3555 to sell the property if they vacate. Due to property value and other factors, the borrower may list the property for sale (where it may be vacant during the marketing time frame) or they may determine that renting the property is in their best interest. At no time is the borrower released from their obligation to repay the mortgage to the loan servicer. When a property is no longer occupied by the borrower as their primary residence it will affect their ability to refinance the mortgage with USDA or continue to be eligible for servicing and loss mitigation options. Borrowers will also be ineligible to obtain a new Section 502 direct or guaranteed loan until they have sold the current dwelling that is guaranteed by USDA.