Posted on: 07th Jul, 2010 10:21 am
I bought a Rental Property using a FHA loan. My girl friend would also like to buy a Rental property with an FHA loan. If she buys the property and then we decide to get married afther in the same year, would that mean she would have to continue to live in the property for atleast one year? Is there any Tax or Loan obligations that I might be missing?
Thanks,
Thanks,
With FHA financing at least one of the borrower on the mortgage has to live in the property for 1 year. If you move out, then the FHA loan would need to be paid off.
http://www.fhaoutreach.gov/FHAHandbook/prod/infomap.asp?address=4155-1.4.B.2.b
http://www.fhaoutreach.gov/FHAHandbook/prod/infomap.asp?address=4155-1.4.B.2.b
If she can qualify for a conventional loan - yes. However I assume this is a multi-unit property when you said "rental", as FHA only permits buying homes to live in, not to solely rent out. So if she was going to refinance a multi-unit property into a non-owner occupied conventional loan you'd be required to have 25% equity.
So if the property is Bank owned and needs some work it might be very possible to get 30% equipty (not including cost of fixing up or sweat equity) and refiancing would be possible with either a little additional cash or possible taking some out....
Correct - if the purchase price is under market value, then if you just refinance what is owed, you would be able to use the current market value. For cash out you need to wait 12 months in order to use the current market value though (if it's higher than the purchase price).