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Fha and renting out spare apt

if i bought 2 bedroom condo under fha loan is it legal for me to rent out the spare bedroom to my cousin? or is this fraud? by antsca_272_927 from Hoboken, New Jersey. Jun 5th 2012 Reply


William J Acres (William_Acres)
#1 ranked lender in Arizona - 4,848 contributions

That is totally acceptable.. so long as you also live in the property.. it's illegal to purchase a home using FHA financing where you have to disclose several times that you intend to occupy the home as your primary residence.. I hope this helps.. I'm a Broker here in Scottsdale AZ and I only lend in Arizona. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. 480-287-5714 WilliamAcres.com

Jun 5th 2012
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#0 ranked lender in

Go for it, but renting to a family member always ends up in Judge Judys court room,...lol.

Jun 5th 2012
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Jonathan Rhode (jrhode)
#110 ranked lender in California - 130 contributions

You are fine with doing that.. As long as you continue to occupy the condo as your primary residence.

Jun 5th 2012
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Brian DiVito (brian@mhmlender.com)
#62 ranked lender in New Jersey - 8 contributions

William is correct, it is legal to rent out the spare room. I work for a NJ licensed Mortgage Banker and would be happy to answer questions you have or pre-approve you if need be. Brian DiVito NMLS#274474908-233-3383 X5007www.briandivito.com

Jun 5th 2012
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so when i apply for a new loan in 2 years the bank won't look back and see that i reported that as income on my taxes and make a big thing out of it?

Jun 5th 2012
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does the same go for 2 fam properties ?

Jun 5th 2012
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#0 ranked lender in

Why would you report it as income? I wouldn't do it if I was you, that may just end up causing you drama you don't need, and it's not necessary to report.

Jun 5th 2012
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#0 ranked lender in

does the same go for 2 fam properties?.......Do you mean a Duplex? Then yes, you would report the income from the separate property, or side you don't live on.

Jun 5th 2012
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Bert Carpenter (BertCarpenter)
#6 ranked lender in Arizona - 1,732 contributions

As long as you move into the residence and make it your primary residence, there is nothing in the rules that says you cannot rent out the rooms. The only time it would be considered fraud is if you did not move in and rented it out instead. ~ Bert Carpenter, The LoansA2z team of NOVA Home Loans ~ NMLS 40586 ~ www.LoansA2z.com 888-889-9950

Jun 5th 2012
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Bert Carpenter (BertCarpenter)
#6 ranked lender in Arizona - 1,732 contributions

Regarding your questions about rental income. You are wise to report it. It is income, and if you don't report it and get caught, the fines, penalties and extra interest could be substantial. Yes a new lender will ask questions, and no the answer "I rented rooms out" will not cause you problems. Regarding two family homes, I have done several loans this year on 4-plexes where the buyer moves into one of the units and the three tenants rent cover all of the expenses, meaning the buyer is essentially living rent free. I say go for it, but agree with Larry, that renting to family can sometimes be a wrong decision. ~ Bert Carpenter, The LoansA2z team of NOVA Home Loans ~ NMLS 40586 ~ www.LoansA2z.com 888-889-9950

Jun 5th 2012
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Janet Chavez (janet@commercialct.com)
#15 ranked lender in Connecticut - 6 contributions

No, it is legal.Janet

Jun 5th 2012
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Team Best Mortgage Option (TeamBestMortgageOptionAtAmbassadorFundingLLC)
#30 ranked lender in New York - 1,960 contributions

It is legal and you shouldn't have any problems moving forward with a new loan in a couple of years. You used to be able to use boarder income that was reported on your taxes. I would have to look into that to see if that is still the case. If you have any other questions give me a call 201-962-3555. All the best, Michelle

Jun 5th 2012
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i really appreciate all your advice and help..i thought that would be fraud because of collecting an income from the property...i also thought when i apply for a loan in the future the bank will see i collected income from the 2 fam and duplex apt and try to jam me up with fraud

Jun 5th 2012
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Todd Tholl (toddtholl@leader1.com)
#4 ranked lender in Iowa - 207 contributions

as long as you occupy the home as well, you can rent the other room

Jun 5th 2012
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Ralph Richard Guertin (ralph@absolutelowrates.com)
#2 ranked lender in Florida - 442 contributions

its legal, not reporting rental income not so sure

Jun 6th 2012
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