FHA Primary Residence meanings

8 Replies

I've been digging through searches and docs online and i can't find a straightforward answer. I'm trying to determine what constitutes a Primary Residence for an FHA. Most things merely say something to the effect of "live in a majority of the year." Simple enough.

On a base level the math is easy. Half the year is: 365/2 = 182.5 -- 183 days is a majority. I can split my time between two locations if i spend 183 days in the FHA property.

My wife is a teacher. Suppose we wanted to spend her summer vacation traveling, say, 6 weeks. Are those 42 days traveling applicable to my primary location? Do i just have to put in more days in my primary than my secondary, regardless of the number?

The reason i ask is because i would love to buy a 4 unit in Portland, OR using an FHA as my first property. But, also spend time in NYC where our families are. I also want to travel more. Trying to figure out exactly how much time i need to be physically present so as not to commit fraud or lose the loan.

Good question for a mortgage broker, but generally it's as simple as occupying the property the majority of a calendar year. You'll also need to move in within 60 days of closing. 

@Robert Fullum , The rules were designed at a very different time when travel was not as easy, the world was much bigger, and home was easily defined.

Actual days are one test.  The mirror is also your test along with questions like

1. Where are you registered to vote?

2. What does your drivers license say?

3. What house have you "homesteaded" for property tax advantage?

4. What address is on your IRS return?

5. Where are your doctors?

6. Where is your place of employment?

It could be worse.  In Monaco they monitor electrical usage to make sure you reside the minimum number of days.

HUD's website references "1 year" being the minimum for being owner occupant on a FHA Loan; sure its a different department; but its the most straightforward answer I've read. The IRS believes in your 51%/49% argument (for stating principal residence), at the same point; if you stay at a property for 14 days* or more it can now be deemed your personal residence.

The Short Answer: I don't believe there is an official posting of the guideline; 

Is two weeks a reasonable amount of time to not live in the principal residence and still be owner occupied? Yes. 

Is six weeks reasonable? Its probably pushing it. If you are renting short term for those six weeks I'm sure you could argue it being vacation (should an issue arise). If you own the property, and have your mailing address / drivers license etc swapped to that other address for the duration; then it is cause for concern in my opinion. 

@Robert Fullum  I agree with @Dave Foster . There are many factors that go into determining if the property is your primary residence or not. If you are working in NYC and "living" in Portland, that is certainly not going to fly.

Traveling during summer and/or visiting family/friends does not harm you, as long as it is till the place you call home.

FYI - I once spoke with someone who wanted to do this, but couldn't get FHA on a duplex because they weren't going to occupy both units. You might have the same issue with a 4plex.

Originally posted by @Russ Draper :

FYI - I once spoke with someone who wanted to do this, but couldn't get FHA on a duplex because they weren't going to occupy both units. You might have the same issue with a 4plex.

For a multi-unit property, you only have to occupy one unit, NOT ALL. Clearly the lender did not know what they were doing.

Originally posted by @Russ Draper :

FYI - I once spoke with someone who wanted to do this, but couldn't get FHA on a duplex because they weren't going to occupy both units. You might have the same issue with a 4plex.

That is not the case. FHA Loans are available on 1-4 units properties with only one unit needing to be owner occupied

Thanks for all the great input. From what you're all saying, it seems like my idea is feasible so long as i'm not too liberal with where i spend my time. 

I'm less concerned about my job because right now most work is done remotely, and fully intend on replacing this job with more location independent work. 

I appreciate the help!