FHA Loan Rental

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FHA Loan Rental

Malik Rasheed
Wholesaler · Long Island, NY · Member since 2020 · 11 posts · 4 votes

I purchased my first house in 2020 with an FHA loan. Can I rent it out or do I have to change my FHA loan to a conventional loan?

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  • Jonathan Taylor SmithBusiness Member
    Rental Property Investor · Durham / Raleigh (Triangle), NC · Member since 2015 · 841 posts · 802 votes
    1y

    @Malik Rasheed - Unless your loan included a special prevision to the contrary, it is normally the case that you only need to live in the home as your primary residence for 1 year. After that, you should be able to do whatever you wish with the home. 

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  • Doug SmithPro Member
    Lender · Tampa, FL · Member since 2013 · 2k+ posts · 2k+ votes
    1y

    Here's your specific guideline:

    Handbook 4000.1, Section II.A.1.b.i(B):

    This means:

    • The borrower must move in within 60 days of closing.
    • The borrower must intend to live there for at least one year.
    • FHA does not require the borrower to remain in the property for a full year if circumstances change (e.g., job relocation, family needs), but the original intent must be genuine1.

    If the borrower moves out and rents the property after fulfilling the one-year intent, FHA does not restrict them from doing so. However, if the borrower never intended to occupy the home or moves out prematurely without a valid reason, it could be considered a violation of FHA occupancy rules.

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