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Firemans Gir…, Home Owner in 60622

I have an FHA loan on my home. I am planning to move and rent my home, I called my mortgage company and they told me I could not rent my property

Asked by Firemans Girlfriend, 60622 Tue Mar 8, 2011

due to the FHA loan. The only conditions that I am allowed would be Family Emergency, Active Military Duty, or my death and family would be trying to rent it. I bought the house in December 1998 does anyone have any suggestions for me? Please help

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15
Typically lenders will want to see 2 years of schedule E's filed on the rental property but there are lenders that will take one year of Schedule E PLUS proof that the lease runs thru one more year (for 2 total).

You will see: http://fhamortgageinfo.com/
3 votes Thank Flag Link Wed Jul 22, 2015
Assuming that the firemans girlfriend will be buying another house, the questions raised are valid regarding her ability to get another FHA loan. Maybe she has 20% down and can go conventional loan on house #2, however, qualifying without the proceeds from house #1 to buy house #2 has lots of obstacles to avoid buy and banks are wary of buy & bail scenario. I had a deal where my buyer had to have 6 months cash reserves to close on the 2nd home. The whole financial picture, job history, asset to debt ratio, credit score and judgements all play a role.
1 vote Thank Flag Link Fri Mar 11, 2011
Dear Fireman's Girlfriend,

Below is the answer to your question. You are only required to live in the property for only one year. After that, you are allowed to lease out your property. Given that you have resided there since 1998, I think you are very safe to lease out this property. Unfortunately, the Customer Service Rep must not have never read #5 of the FHA Deed of Trust. Here it is below as a reference:

5. Occupancy, Preservation, Maintenance and Protection of the Property; Borrower’s Loan Application;
Leaseholds. Borrower shall occupy, establish, and use the Property as Borrower’s principal residence within sixty days after the execution of this Security Instrument (or within sixty days of a later sale or transfer of the Property) and shall continue to occupy the Property as Borrower’s principal residence for at least one year after the date of occupancy, unless Lender determines this requirement will cause undue hardship for Borrower, or unless extenuating circumstances exist which are beyond Borrower’s control.(THERE IS MORE TO #5, BUT THIS IS PERTINENT TO YOUR SPECIFIC QUESTIONS.)

I hope that this clarifies your question and has eased your worries.

All the best to you!!!

Sincerely,

Dianne Y. Ayala Steffey, MBA, CLU, ChFC, NMLS#267658
Your Personal Mortgage Consultant for Life!
Sterling Mortgage Services NMLS#373771
2929 Mossrock, Ste 222
San Antonio, TX 78230
210.349.2102
210.349.1544 fax
210.831.8749 cell
http://www.sterlingloans.biz
dianne@sterlingloans.biz
1 vote Thank Flag Link Wed Mar 9, 2011
Hi Dianne! I'm in the same situation as the person that submitted the question but I bought my FHA condo in 2008 and refinanced (streamline) in January of 2013. Do the 5 years I've been living in the condo count or does it start from scratch after the refinance.
Flag Sat Mar 16, 2013
You can covert it into rental and purchase another home. You're broker in misinformed. Work with an fha expert.
Call me if you have any questions.
1 vote Thank Flag Link Tue Mar 8, 2011
It is interesting to me how everyone on this forum talks about misinformed, uneducated, sloppy, etc, yet your verbiage, spelling and grammar are ridiculous and so unprofessional.
Flag Tue May 24, 2016
It's truely remarkable that you would even know (remember) that FHA had this rule since it's been 13 years since you took out the loan. Why would you even bother to contact them? Do you think they are watching you all these years? If they were that organized we would not be in the biggest real estate disaster since the Great Depression.
The rule that you cannot rent does not apply for eternity. You can clearly rent the place and do not bother talking to FHA about it. Just do it and move on. If you must feel the need to contact them, ask them to show where it says you cannot rent. If you have the loan documents read them carefully and see what it says. You will see.
1 vote Thank Flag Link Tue Mar 8, 2011
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0 votes Thank Flag Link Fri Jun 24, 2016
0 votes Thank Flag Link Fri Jun 24, 2016
Alex,

My response to the question asked by Firemans Girlfriend was correct. Firemans Girlfriend DID NOT ask whether or not someone is allowed to have multiple FHA loans at the same time. The question simply asked whether or not she could (legally) rent out the house.

Loan officers receive a bad rap when they give poor advice. The advice I gave was for their own piece of mind, and correct. I suggest you should probably read the questions a little more carefully next time before you go and attack someones knowledge and credibility, especially on a public forum.

Have a great day!


Mike.
mcline@waterstonemortgage.com
0 votes Thank Flag Link Thu Mar 10, 2011
Michael,
No one is getting upset here. I just used you as an example as to one of the reason's we as loan officers get a bad rap with lack of knowledge and the inability to guide someone to the correct answer. Nothing is worse than having the borrower go on a wild goose chase.
Fortunately. I spoke to Firemans Girlfriend over the phone and guided to the right dierction.

Thanks
Alex Romo
alexander@chicagobancorp.com
0 votes Thank Flag Link Thu Mar 10, 2011
Many property owners never contact the lender regards to rental(s). Some owner never even thought about it just leased the property. Wide open regards what is consider family emergency. Many families leased homes due to reduction in job income HOWEVER did not want a short sale or foreclosure.

Lynn911 Dallas Realtor & Consultant, Loan Officer, Credit Repair Advisor
The Michael Group - Dallas Business Journal Top Ranked Realtors
972-699-9111
http://www.lynn911.com
0 votes Thank Flag Link Wed Mar 9, 2011
Alexander,

It appears you're getting upset for no reason. Most loan officers that are still left in the business are knowledgeable, at some point. The fact that FHA does allow a borrower to have 2 loans at once, under certain circumstances, is not a big secret. So please, try to refrain from acting high and mighty. I suggested they look through their closing papers mainly for their own piece of mind, so they can rest assured that the current lender will not come after them for any reason.

Mike.
mcline@waterstonemortgage.com
0 votes Thank Flag Link Wed Mar 9, 2011
Terri, thanks for the call.

Guys, Do your homework. FHA will allow you to purchase another home with an FHA loan and keep the existing one without having to sell or refinance. There are certain cirumstances in which you can do this, i.e family increasing/relocating. No need to scramble through piles of old junk to find the closing papers. This is ridiculous and quite honestly as bad of info as what your bank gave you.
Unfortunately, servicing banks hire clueless employees waiting for the clock to turn 5pm and some brokers just don't know the guidelines. Monkey jobs......

If you have any FHA questions, Call the expert!
Alex Romo
Manager/Senior Mortgage Banker
NMLS# 217060
alexander@chicagobancorp.com
0 votes Thank Flag Link Wed Mar 9, 2011
Can you move out of a home purchased with a FHA loan if it has been under a year (due to family size and relocation), and then purchase another home with an FHA loan while renting out the first house?
Flag Tue Jan 19, 2016
As the saying goes, a little knowledge is a dangerous thing! Michael is correcty, this is absolute hogwash! Really, why something is not being done about these banks and their complete lack of concern for the well being of their clients is beyond me!
0 votes Thank Flag Link Wed Mar 9, 2011
First, Great answer Michael Cline! By the way, if you are still a Fireman's Girlfriend, your boyfriend (or girlfriend) may want to look into the Neighborhood Stabilization Program. He/She may qualify for buying a house that is deeply discounted because of his (her) profession. Ask Michael to check that out for you. It's always better to use a local lender for those kinds of programs...
0 votes Thank Flag Link Tue Mar 8, 2011
One must take into consideration the length of time you have lived in that home and in order for you to use the prospective rental income to qualify for your new mortgage the new lender will consider home much equity (if any) you have in what will then be considered a rental property.

Good Luck & Feel Free to let me know if you need help!
0 votes Thank Flag Link Tue Mar 8, 2011
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