FHA Live In Requirements

5 Replies

How long do you have to live in the property to qualify for an FHA loan? Is it possible to get an FHA loan, live there for a year or so, then refinance and pay off the FHA load an move out?

Yes, you are required to live there for one year.  Also, at that point you wouldn't be required to refinance, unless you just wanted to.

Hi John, yes you can do exactly what you proposed in your question.

Ok great thanks for the input!

Follow up question.... If you are able to pay off the FHA loan before a year has passed, does that exempt you from having to live in the property?

Originally posted by @John Terwilleger :

Ok great thanks for the input!

Follow up question.... If you are able to pay off the FHA loan before a year has passed, does that exempt you from having to live in the property?

No. Afaik, you (only) have 60 days to move in from closing, otherwise you'll be up for a big "please explain". And given your question - you won't have any explanation!

However, if you do move in, but want to refinance before the year is out, my answer would be: Why wouldn't the bank want all their money back, quick? Mind you, if you made a habit of applying for FHA-approved loans more than once a year, every year, they'd likely take a cold hard look at your motivation, compared to how it relates to their intended purpose of helping home-owners who don't want to wait any longer to get into their own home, but haven't been able to save a high deposit.

I'm curious: how will you get from 3.5% equity (if that), to more than 20%, in less than a year?

Oh I get it, you're a flipper, who's just looking to see if lying to your Lender is acceptable! ...

Originally posted by @Brent Coombs :
Originally posted by @John Terwilleger:

Ok great thanks for the input!

Follow up question.... If you are able to pay off the FHA loan before a year has passed, does that exempt you from having to live in the property?

No. Afaik, you (only) have 60 days to move in from closing, otherwise you'll be up for a big "please explain". And given your question - you won't have any explanation!

However, if you do move in, but want to refinance before the year is out, my answer would be: Why wouldn't the bank want all their money back, quick? Mind you, if you made a habit of applying for FHA-approved loans more than once a year, every year, they'd likely take a cold hard look at your motivation, compared to how it relates to their intended purpose of helping home-owners who don't want to wait any longer to get into their own home, but haven't been able to save a high deposit.

I'm curious: how will you get from 3.5% equity (if that), to more than 20%, in less than a year?

Oh I get it, you're a flipper, who's just looking to see if lying to your Lender is acceptable! ...

Nope, you are incorrect.  I am not trying to lie to my lender and I am not a flipper.

I am very new to this and think it is important to know every possible corner case before I go into a deal.  Knowing only the 'happy path' can lead to missed opportunities. 

As for how would I make up the equity?  Honestly, I am not sure but again I am new and just trying to ask questions to gain knowledge.  If I had to answer that question I would say rehabbing the property, increasing rents, and paying into the principle with my day job's salary could potentially get me there.

The end goal I am trying to reach is:

1. purchase a property with an FHA loan because money doesn't grow on trees and I want to have some left over for renovations. (Yes I do know about the FHA 203k)

2. live in the property to save some money on rent

3. refinance as quick as possible so I can get some money back 

AGAIN, all of my questions are purely to know the limitations of the deal I make.  Not trying to lie to anyone or cheat the system.

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