Is there a way to purchase a property as OO if there is a lease from the prior owner?

Question

Is there a way to purchase a property with a FHA with intent to Owner Occupy even though there are tenants in the existing unit that had signed a lease with the previous owner until a given date after the property is closed on? My understanding is that a lease goes with the property so you can't terminate the lease upon the sale. So could I purchase the property with a FHA loan and put off living there until the tenant lease is up then move in?

Sam Tang · Answer

Went to check the place out and sounds like I am out of luck as the current owner does not want to kick the current tenant out. (long term tenant with good history). So he is specifically marketing to an investor. I did speak to my lender and they told me my only option would be to refinance out of the investor loan after the tenant lease was up. With rates right now though its probably not worth it.

Matt Devincenzo · Answer

See if you can make your offer contingent on the tenant relocating within 30 days of closing.

The seller can make whatever offer necessary to get the tenant to agree to vacate by XXX date and both parties terminate the lease.

If that is agreed to just have the sellers portion of the purchase escrowed until after the unit is vacant and inspected.

Not sure it will work but it might depending on the seller's motivation to get the deal done.

Wayne Brooks · Answer

FHA reg.s say you must occupy the property within 30 days.

Brandon Turner · Answer

Interesting question, Sam Tang - and I have no idea but I'm curious.  So I'll at least bump this thread to see if anyone else knows!