I currently do not own a house, but I'm thinking about purchasing a 1 unit beach property and renting out the unit weekly during the summer months. I don't have 20% to put down, so an FHA first time home buyer loan would make sense. Would this be legal to do with type of loan?
FHA you have to live there as a primary residence. It's not a first-time homebuyer program. If it's a good distance from your employment or in a vacation area, there's a good chance the underwriter won't approve it as a primary residence for FHA. Conventional second home is an option though, and the down payment would be greater.
In terms of renting it out on a weekly basis, it depends on what you sign with your lender. Most lenders include a clause that prohibits using the property for short term rentals. Even investment purchases may have that clause. While it's probably low odds a lender would ever catch wind of it, it's something to keep in mind. There's also your insurance coverage to consider and whether the insurance allows short term rentals.
@Mike Johnson FHA requires that you OO the property for at least 1 yr. If you don't then its mortgage fraud.