How long does a buyer have to live at a property bought with a 203K loan? I thought it was 3 years. Am I correct?
Hi,
A 203k loan is essentially a FHA loan, the only difference between a conventional 3% down FHA loan and a 203k is you can borrow between $5k and $35k as construction funds to fix up and make cosmetic repairs to the property.
When construction is completed (203k maximum time provision is 6 months) and the permits and independant inspection are completed the loan is a FHA Loan.
Now, tax wise there are advantages to owning the property for 3 years as owner occupied, however there is no law that say’s you must own the home for 3 years!
Good luck,
GR
Hi
Its really simple. Its just like any other owner occupied loan. You are required to owner occupy the home for 1 year. Its fair game after that. But here is the actual guideline from the FHA Handbooks. Info. is current to todays info.
b. FHA Requirement for Establishing Owner-Occupancy
At least one borrower must occupy the property and sign the security instrument and the mortgage note in order for the property to be considered owner-occupied.
FHA security instruments require a borrower to establish bona fide occupancy in a home as the borrower’s principal residence within 60 days of signing the security instrument, with continued occupancy for at least one year.
Kevin,
Thanks for your help. Take care.
JP