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FHA Loan Residency Requirements

One of the unique features of FHA home loans is the occupancy or residency requirement. According to FHA rules, borrowers must certify that the home being purchased with an FHA insured mortgage must be the primary or principal residence.

How does the FHA define “principal residence”?

According to the FHA official site, “A principal residence is a property that will be occupied by the borrower for the majority of the calendar year.”

This means that summer homes, vacation properties, time shares and similar property types are ineligible for FHA new purchase home loans. The part-time nature of these homes excludes them from the FHA mortgage loan program.

This issue is easy enough to understand for a single borrower, but what do the rules say when more than one FHA loan applicant is listed on the loan? Do all the occupants of the home have to live up to the FHA occupancy rule?

According to the FHA, the rules are a bit flexible in this area. “At least one borrower must occupy the property and sign the security instrument and the mortgage note for the property to be considered owner-occupied.”

Some FHA home loan programs have more flexible options for occupancy. The FHA Good Neighbor Next Door program, which offers housing incentives to law enforcement officers, firefighters, emergency medical technicians and teachers, provides leniency in its occupancy rules based on a buyer’s individual circumstances.

Applicants must submit written requests for such leniency, explaining circumstances which might prevent the buyer from taking immediate ownership of the property or having a break in the occupancy of the home.

That exception aside, most FHA home loans will require the borrower to take ownership and maintain primary residency in the home according to FHA requirements. If you have unique circumstances such as a military deployment, contact your lender or the FHA for more information on how to proceed.

Joe Wallace - Staff Writer

By Joe Wallace

July 6, 2011

Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for for (8) years and is currently the Associate Editor for

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About was launched in 2010 by seasoned mortgage professionals wanting to educate homebuyers about the guidelines for FHA insured mortgage loans. Popular FHA topics include credit requirements, FHA loan limits, mortgage insurance premiums, closing costs and many more. The authors have written thousands of blogs specific to FHA mortgages and the site has substantially increased readership over the years and has become known for its “FHA News and Views”.

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