can I rent for a month before closing on my condo if I purchase with FHA loan putting down 3.5% My agent says yes, broker friend says no

Asked by Sarah & Michael Malcolm, Chicago, IL Tue Dec 8, 2009

Help the community by answering this question:

+ web reference
Web reference:

Answers

5
Cecelia Marl…, Mortgage Broker Or Lender, Chicago, IL
Thu Dec 10, 2009
Hi Jen,
If you are looking to rent the condo that you are purchasing all the below answers are correct, with FHA there is a specific form that asks if you are purchasing a property that you currently reside in. The most important thing is that you have a solid 12 month rental history, unless you were living with parents prior to renting. Overall, as a lender, yes you can purchase a property if you rent for a month, it just needs to be well documented.
0 votes
Jeffrey Kropp, Agent, Chicago, IL
Wed Dec 9, 2009
My guess is that the seller would be reluctant to entertain such an arrangement. The seller would become a landlord subject to al the Illinois rental laws that require notice of evictions, etc,. so if your loan falls through the seller would have to evict you. Unlikely, perhaps, but I doubt the seller would take this risk given that a good 30% of loans fall through now as lenders are looking for reasons to reject loans.

Good luck! Lets us know what happens.
Web Reference:  http://www.1sthomegroup.com
0 votes
Al Akerman, Mortgage Broker Or Lender, Lakewood, NJ
Tue Dec 8, 2009
Absolutely. Just like you can buy the house you've been renting for the past 20 years, you can buy the house you've been renting for a month. Conventional or FHA.

For the mortgage application you will have to fill out a two year history of where you lived. It doesn't matter if you've lived in the same place for two year period or if you've moved in between.
0 votes
Victoria Pan…, Agent, Miami, FL
Tue Dec 8, 2009
Yes; you can lease the property buying witha 3.5% down of and FHA loan or buying with a conventional loan. Sometimes for a seller when they have a vacant house it is much better to receivea monthly rent while the loan is closed. You have to have two different contracts, one for the purchase and one for the lease. I did it many times for my clients.

Good Luck and Happy Holidays!!!!!

Victoria Pando
TX and FL Real Estate Broker
WIZ Realty
Austin, TX
512-696-3015
305-981-6608
vickypando@gmail.com
0 votes
Andrew Luett, Mortgage Broker Or Lender, Chicago, IL
Tue Dec 8, 2009
Hi Jen,

That isn't a problem as long as seller is in agreement with the situation. You should obtain a pre-approval letter or, ideally, a loan commitment to secure your ability to purchase the condo as soon the month is up.

Please let me know if I can help further.

Kind regards,
Andrew

773-456-9662
aluett@luettmortgagegroup.com
0 votes
Search Advice
Search
Ask our community a question

Email me when…

Learn more