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FHA Loan Occupancy Rules

2015-34Some borrowers get in touch with us with questions about FHA loan occupancy rules. One of the most common questions about FHA loan occupancy requirements involves those who must travel for business, or who find themselves having to relocate to another state because of job issues.

Are borrowers who spend less time at home than a typical home owner considered in violation of FHA mortgage loan occupancy rules? For example, the homeowner who now works and lives in another state but commutes home for the weekend?

FHA loan rules require a borrower to take ownership of the home at closing time and use the home as the primary residence for at least one year after the closing date. The borrower can’t vacate the home and rent it out during this period of time as that would be in violation of the FHA loan occupancy requirements. The borrower also can’t “intend to establish a principal residence elsewhere” at the time of the FHA loan.

Borrowers who find themselves in a work situation where they become commuter occupants may be tempted to explore their FHA loan options for another home in the new location. While FHA loans are technically possible in such cases, the borrower will need to work with the lender and there are qualifying circumstances for “second” FHA loans–the justification needed would include a change in family size, change in job, etc.

Occupancy is an important issue when it comes to new FHA loans–the primary reason FHA loan rules include an occupancy requirement is to prevent single family FHA mortgages from being used by investors rather than house hunters.

Do you have questions about FHA loans? Ask us in the comments section.


Bruce Reichstein - Staff Writer

By Bruce Reichstein

June 26, 2015

Bruce Reichstein has spent over three decades as an experienced FHA and VA home loan mortgage banker and underwriter where he was responsible for funding “Billions” in government backed mortgage loans. He is the Managing Editor for where he educates homeowners on the specific guidelines for obtaining FHA guaranteed home loans.

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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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