Financing in 18102>Question Details

Rondokye, Home Owner in 18102

Help with FHA mortgage and refinancing.

Asked by Rondokye, 18102 Wed Feb 16, 2011

I purchased a home in Allentown in 2007 with an FHA loan and its been my primary residence ever since. I have excellent credit and have always paid my mortgage (and all other bills) on time. I am not house poor because I was a responsible home-buyer. I'm now getting married and my fiance owns a home as well. We decided to live in his home because his is in a better location, although I now have to commute to work. According FHA, I am not allowed to rent out my home. They told me that if I do not live there as my primary residence, my only options are to sell or refinance, or they will 'lock it up.' With today's market, I don't believe that it will appraise high enough to sell or refinance. I contacted my state senator and his office contacted FHA, who gave me 18 months to figure this out. Has anyone delt with this before? I feel as if I am being penalized for being a responsible person.

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Rudy R. McDowell’s answer
Hi, Rondokye

In all my years of doing FHA mortgages, I've never heard of such a thing. You have been misnformed. As a result of your life change, you neither have to sell or refinance your home unless you wish to. Your FHA loan will remain unchanged. The person that told you this is either horribly misinformed or simply trying to get you to line his/she pocket with a needless refinance.

If you do wish to refinance and that home is still your primary residence until your marriage and move, you can still refinance via a FHA streamline.
1 vote Thank Flag Link Wed Feb 16, 2011
I hope this clarification helps you... Rondokye

Initially when you purchase a home, FHA provides home financing for owner-occupants only, and requires that the buyer occupy the residence within 60 days. FHA does not prohibit a homeowner from changing the occupancy status, and using the property as a rental if the situation changes later on in ownership. Obviously, a borr should not take advantage of FHA financing to purchase an investment property with low down-payment, but it clearly does not sound like that is what you have done in this circumstance.

There is another entity that provides financing through a state bond program, and this financing program is called PHFA (Pennsylvania Housing Finance Agency). PHFA loans are originated the same way as FHA loans, and also use the base guidelines and requirements of an FHA loan. So essentially, the financing would be provided through PHFA as an FHA loan. PHFA does prohibit its borrowers from using a property as a rental, even if it was initially used a primary residence. So are you sure the issue is coming from FHA, or is it coming through PHFA?

If you do have financing through PHFA, then you will need to refinance or sell the property. FHA does allow a buyer to refinance a current FHA loan to a new FHA through a streamlined process that does not require an appraisal. Please feel free to touch base with me if you have any interest or would like more information about this program.

Thanks!

Spencer Davis
Home Mortgage Consultant
Heritage Home Mortgage Group, LLC
An Affiliate of Wells Fargo Home Mortgage
484.201.8366

This is from a lender mouth any question give spencer a call or if you looking to sell
Fady Salloum
Coldwell Banker Heritage
Realtor
484-554-4846
0 votes Thank Flag Link Wed Feb 16, 2011
Rondokye,

To answer your question....... One of the questions you're asked at closing is if you will by occupying the property as a primary residence. Most people just rent it out anyway which I do not advise. I had a similar situaton happen to me with a bank. Were they trying to probe to see if you were have problems paying your mortgage? Because that is what happen to me.

Banks are trying to be very careful these days. If you ask me it's bad for business. But who am I.

Here is what you need to do. Refinance and see if you can say it is a vacation home. Talk to a mortgage broker, not a bank. They will give you all the details on vacation home financing. It has to be so many miles away from your new primary home. If that doesn't work than refinace it and say that you want to be able to rent it out. Some mortgage companies will allow you to rent it out as long as they are named as additionally insured.

It really would be helpful to know if the 18 months to figure it out is beacuse they feel like you are about to default. If that is the case then you should contact an attorney.

Call me at 610-737-5369 and I will explaiin the outcome that I had and will provide you with some contacts that I used.

Thanks and good luck,

Sean LaSalle
Weichert Realtors
Allentown, PA
0 votes Thank Flag Link Wed Feb 16, 2011
Hi Rondokye,

This seems rather odd to me. When you bought the home your intent was to live in it as your primary residence, and that you did. You have a major life change (Congratulations!!) occurring and you will need to do something with your current home. I know many people who rent out their first home with no repercussions but since you have taken the route you did you may want to consult a Real Estate attorney and go over your loan docs to see if there are other options for you. I can put you in touch with a good one if you want to give me a call or send me an email.

Of course if you want to see how much your home is worth I can certainly let you know what it might bring on today's market. You may be pleasantly surprised at where you stand financially. In any event, don't do anything hastily and get more than one opinion on your course of action. Oh, and congratulations for staying on top of your financial responsibilities as you did and for not buying more house than you could afford. Have a great day and feel free to give me a call anytime.

Sincerely,

Bob Berner ABR, CRS, GRI
Associate Broker

Prudential Patt, White Real Estate
bobberner@pattwhite.com
(610) 762-5061
http://www.bobberner.com
0 votes Thank Flag Link Wed Feb 16, 2011
Either way. I am a certified mortgage coach and I live in Allentown. Call me after 3pm today and I will be happy to answer your question.
0 votes Thank Flag Link Wed Feb 16, 2011
@James....that's weird because that's exactly my question. Not sure why someone would copy and paste :(
0 votes Thank Flag Link Wed Feb 16, 2011
Hi. Please call me after 3pm today and I will do my best to answer your questions. My cell is. 610-217-5241
0 votes Thank Flag Link Wed Feb 16, 2011
Hello Rondokye,
I suggest that you contact a mortgage broker to assist you as they are the experts in financing so will be able to guide you best. And...a local real estate agent can give you a comparative market analysis so that you will have a better idea of what your home is worth in this market.
Good luck!

Laura Feghali
Prudential Connecticut Realty
0 votes Thank Flag Link Wed Feb 16, 2011
Hello Rondokye,

I'm a Real Estate Agent here in Allentown. Give me a call or send me an email and I'll put you in touch with someone that may be able to help you. I look forward to speaking with you soon. Thanks!

Chris Schaffer
610-639-1315
cschaffer@kw.com
0 votes Thank Flag Link Wed Feb 16, 2011
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