Property Q&A in 60622>Question Details

Helpless In…, Other/Just Looking in 60622

My husband has taken a new job out of state due to the economy. we have owned our house with an fha mortgage

Asked by Helpless In Michigan, 60622 Wed Jul 1, 2009

for 2 and a half years. we cant sell the house for what we owe, my only option is to rent it out. is there a penalty for renting fha mortgage houses? Otherwise we will lose it to forclosure

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Have you looked into a balance or principal reduction program. With a balance reduction program the only requirement is that you be upside down in your loan by at least 75%. The Fed is going to be requiring banks to preform principle reduction programs next month. but there are several companies doing them already. Once you get the reduction you can sell the house at a more realistic price.

Thanks
Adam T Barrera
0 votes Thank Flag Link Fri Sep 17, 2010
If you secured the mortgage as your primary residence it is not uncommon for the lender to have the right to call the note due if it's being used as rental property. This is because the interest rate would have been higher and the loan subject to different requirements.

Scott Newman
0 votes Thank Flag Link Thu Jul 2, 2009
No, not as long as you have held it and lived there for at least a year.

In fact there are some great tax ramifications in renting the property in your circumstance.

Let's say that you receive a rental income that meets or nearly meets your obligations and you preserve your investment; you have now constructively converted your home into a rental property. That means in the future if you still have to sell at a loss, you can deduct your losses from your basis in the house.

Talkto your tax man about this. And may the Lord bless your path

Maurice
0 votes Thank Flag Link Wed Jul 1, 2009
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