Tax Implications for Rental Property With First Time Homebuyer Loan

[Jeff McNamee]

Hi all- I have a condo I rent out that I originally obtained through a first time home buyer loan. Well my lender sent me a letter because they noticed this isn't my primary residence anymore and the loan states that I need to be the primary occupant for the life of the loan. They said that I need to contact a tax professional because there might be tax implications and it may affect my mortgage interest deduction. Can anybody shed some light on what the penalties are here or the tax implications, how it affects mtg interest deductions.
Thanks in advance!

[Steve Babiak]

You say you talked to the lender, but did you READ the loan documents as Jon suggested earlier? The lender customer service reps aren't always that savvy, so you have to see what you agreed to with your original loan.

You might even find that so long as you were an owner occupant for some period (like one full year) of consecutive months, that you would be allowed to move elsewhere, and keep the loan in place while renting out that condo! So do some reading.