Richard - IRS Tax Code which governs Tax-Exempt Mortgage Revenue Bonds (MRB), which was WHEDA's source of funds at that time, require that real estate financed with proceeds of a MRB must be owner occupied. Paragraph B.3. of the WHEDA Home Program Borrower's Affidavit that you signed when obtaining that loan states, in part, " . . . . I will not use the property as a recreational or vacation home, or rent the property to any other person (except for the non-owner occupied units of a two to four unit), or use more than 15% of the area of the residence in a trade or business."
In addition, item #2 in the WHEDA Home Program Mortgage Rider states, in summary, that the borrower agrees to occupy the property as their principal residence throughout the term of the loan. Failure to do so would constitute a non-monetary default on the loan and could result in the loan being called due and payable.
I'm sure WHEDA doesn't want to take possession of the property, especially a condo, in the current real estate market environment. On the other hand, they can't just ignore the Tax Code.
They might be willing to let you rent the property as long as you simultaneously have it actively listed for sale with a real estate company. I suggest that you call WHEDA at 1-800-562-5546 to discuss your options before getting into a situation that is unfavorable for you.... more