FHA Guidelines

fha  60 day occupancy requirement residence

FHA won’t demand an acceleration of the Note unless there is reason to believe that you have not or have never intended to occupy the property. Your lender is responsible to FHA to guarantee the property is owner occupied at the outset of the loan… but changing occupancy later becomes a servicing issue rather than an origination issue. I am less familiar with servicing issues than origination, but the prinicpals in general are common between servicing and origination.

Occupancy (or intention to occupy) by the spouse satisfies the occupancy requirement for a veteran who is on active duty and cannot personally occupy the dwelling within a reasonable time.  Occupancy by the spouse may also satisfy the requirement if the veteran cannot personally occupy the dwelling within a reasonable time due to distant employment other than military service. In these specific cases, consult you Regional Loan Center to determine if this type of occupancy meets VA requirements.  The cost of maintaining separate living arrangements should be considered in underwriting the loan.

Secondary residence are only permitted when the local FHA office agrees that an “undue hardship” exists, meaning that affordable rental housing that meets the needs of the family is not available.  The only circumstance this is allowed under is when the borrower must obtain secondary residence because of seasonal employment, or employment location, or other circumstances not related to recreational use.

Many FHA borrowers are actually co-borrowers under the mortgage loan. For example, a parent and child may co- sign on a loan, or even more common, two spouses may co-sign on the loan. The FHA does not require both borrowers to occupy the home, but instead requires that at least one of the borrowers occupy the home as his principal residence for one year. This allows family members to help each other obtain home loans without requiring them to both live in the same home.

In certain circumstances, the FHA will allow borrowers to obtain a second FHA loan, or an FHA loan on a secondary home. The rules for second FHA loans and FHA loans on secondary homes are very specific and generally require some type of extenuating circumstance, such as as an employer-required relocation. In these rare cases, the above requirements relating to owner occupancy may not apply.

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