The Home Buyer's Korner

Information presented should be used for educational purposes only.

January 22nd, 2016

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NASHVILLE, TENNESSEE

Home Buyer’s Korner

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FHA Occupancy Rules

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Get Pre-Approved for a Home Loan

For FHA to insure your mortgage, your application must include the type of occupancy you intent to use the home for and FHA only allows for owner occupied homes to participate in the program. It’s designed to encourage home buyers to purchase one to four family properties, including condominiums, townhomes, manufactured and modular housing, but excludes property investors from using the FHA mortgage loan program to purchase investment property.

The intent of the FHA home loan program is to help eligible home buyers to obtain affordable housing using a low-cost, low down payment at a competitive interest rate. These benefits are not intended to help property investors to purchase residences for rental or re-sale.

The full explanation of the rules can be found in HUD Handbook 4155.1 Chapter Four Section B, which starts off by defining what a “principal residence” is. Chapter Four defines it as a principal residence that the property that will be occupied by the home buyer for the majority of the calendar year. At least one home buyer must occupy the property and sign the security instrument and the mortgage note in order for the property to be considered owner-occupied. FHA security instruments require a home buyer to establish bon-a-fide occupancy in a home as their principal residence within 60 days of signing the security instrument, with continued occupancy for at least one year.

Generally a home buyer cannot have more than one FHA loan, but there are several exceptions depending on circumstances. Some of those include co-signing for a family member or purchasing a new home due to relocation and the home buyer plans to retain their existing home as a rental. If you think you might have a valid exception and want a second FHA loan discuss your circumstances with your lender.

To prevent circumvention of this restriction on making FHA-insured mortgages to investors, FHA generally will not insure more than one principal residence mortgage for any home buyer. FHA will not insure a mortgage if it is determined that the transaction was designed to use FHA mortgage insurance as a vehicle for obtaining investment properties, even if the property to be insured will be the only one owned using FHA mortgage insurance.

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TENNESSEE HOME OWNERSHIP TOOLS

Your Home Purchasing or Refinancing & Renovation Tools,

Home Improvements, Home Renovations,

Mortgage Loan Officers, Real Estate Agents & General Contractors

are ready to assist you with your home purchase.

Here are just a few of the home improvements

you might consider with any Home Renovation loan

Repair or replace a roof

Install, replace or repair gutters and downspouts

Replace, repair or upgrade your HVAC system

Repair or replace plumbing

Install, repair or replace electrical systems

Kitchen remodeling (including the purchase and installation of appliances)

Bathroom remodeling, Full interior painting, Total exterior painting

Repair or replace a septic system and/or well

Disability access (wheelchair ramp, elevator, widen doorways)

Build, repair or replace a deck, patio or porch

Basement waterproofing and finishing

Abatement/Stabilization of lead-based paint hazards

Replace old windows, Room additions, Finish an attic

Add a second story to your home

Replace a termite damaged sill plate (a water-damaged sill plate also)

Possible landscaping items such as correction of grading & drainage problems,

tree removal, repair a driveway and sidewalks

FHA 203K

Your Home Purchasing or Refinancing & Renovation Tool

Mortgage Loan Officers, Real Estate Agents & General Contractors

are ready to assist you with your home purchase

FANNIE MAE HOMESTYLE

The Conventional Alternative to FHA 203K

Great for Real Estate Investors and Second Home Renovations

Mortgage Loan Officers, Real Estate Agents & General Contractors

are ready to assist you with your home purchase

USDA RURAL DEVELOPMENT

Up to $10K for Home Improvements, Renovations or a Simple Remodel

Mortgage Loan Officers, Real Estate Agents & General Contractors are ready to assist you

A SIMPLE HOME SHOPPING INSPECTION TOOL

Organizing your home shopping experience affords a wise decision-making process.

This simple home inspection tool makes your ultimate buying decision a smart one.

To print this document, click on “Open in New Window” located at the lower right corner;

click on “File”; then click on “Print”. In the center of the screen you will

have the option to “Create A Printable PDF of the Presentation”.

START YOUR PATH TO HOME OWNERSHIP TODAY

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