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I have a home in Wyoming with a USDA loan on it. I am moving out of state and want to buy again but will likely not be able to sell the home for what I owe. I don;t want to short sale so can I rent the current home that has a USDA loan on it? I am told USDA doesn't allow it. by pippir_366_257 from Roy, Utah. Jun 8th 2012 Reply


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#0 ranked lender in

Read the trems of your note. If you have been there for at least a year, and you are having to move because of work, then I would think that you should be okay. Two thoughts here. 1. just as long as you make your payments on time, they're not going to know you moved. 2. The last thing lenders want to do right now is foreclose on ANOTHER property, so again, just as long as your payments are on time, you should have no problems.

Jun 8th 2012
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Brett Pehrson (brett@homeloansinutah.com)
#3 ranked lender in Utah - 208 contributions

I don't believe there is any specific clause that states you can't eventually rent it out. I just closed a USDA loan and don't recall ever seeing anything like that in the closing package. But you would have signed a document stating you intended to occupy the property for at least 1 year after closing on your USDA loan. There may be some confusion, as the scenario you're suggesting DOES apply to Utah Housing loans at any time you carry the loan.

Jun 8th 2012
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William J Acres (William_Acres)
#1 ranked lender in Arizona - 4,620 contributions

Read your note.. it should detail your occupancy requirements, and my guess is that so long as you have lived there for at least a year, and your move is necessary, you should be ok to rent it out... so long as the payments are being made on time, you should be ok.. if you want ot know for sure, you should contact a real estate attorney. 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 9th 2012
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Joe Metzler (JoeMetzler)
#1 ranked lender in Minnesota - 2,357 contributions

I've never seen a note that prevents you from renting out the property after you've lived there at least one year. The "don't allow" is at the time of purchase. USDA does not offer investment loans.

Jun 10th 2012
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William Menghi (WMENGH_760_276)
#52 ranked lender in Utah - 30 contributions

William here... 20 year veteran of originating loans.... someone you can trust!Have you ever known a bank not to accept an on time payment? If your answer is no and you make your payments on time, no one shall ever know. But what you should likely do is get a Local PO Box to recieve your statements and then have it forwarded.... Easy with UPS stores.... ... if you're a stickler for following rules... see an attorney with all your loan papers and he/she can tell you. I could too but you can't afford my fee. If you're able to read legal documents yourself then read your note and find where it says it is prohibited, if you can't find it, it is not.

Jun 8th 2012
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#1 ranked lender in

Review your loan docs, including the small print, to see if that answers your question, if not call'em and just inquire. There should be a help line within your loan docs.

Jun 8th 2012
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Team Best Mortgage Option (TeamBestMortgageOptionAtAmbassadorFundingLLC)
#32 ranked lender in New York - 1,959 contributions

As long as the bank is getting their money on time I wouldn't think it would be an issue but I would look through your loan docs to be sure. All the best!!

Jun 8th 2012
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Anthony Limon (anthonyl)
#24 ranked lender in Texas - 25 contributions

If you are 62 yrs or older you may consider an FHA reverse mortgage purchase your next home. There are no income or credit requirements. You would need to however prove your down payment with an acceptable paper trail. Feel free to call 866-640-5722 ext. 126

Jun 8th 2012
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Linda Wintersteen (Linda123)
#63 ranked lender in Arizona - 884 contributions

I would be very careful, i have working for numerous lenders, and yes, they do go and knock on doors ,and if they get a whiff of something not right, they can call the note.. I worked with the private investigators at certain banks.. the best advice I c an give you, if NOT TO CHANGE your bank, or bank address ... that is a dead give away...

Jun 9th 2012
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DOUG CAPPS (DOUG CAPPS)
#1 ranked lender in Mississippi - 124 contributions

Hi Roy,There may be a different answer if you have USDA Direct Loan versus a USDA Guaranteed Loan. On the USDA Direct, you would need to contact your local USDA office. If you have a USDA Guaranteed loan, USDA is not going to penalize you if you have to "move" out or relocate and rent out your property. USDA is a make sense loan, but they also don't want you to intentially have multiple rental properties.

Jun 11th 2012
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Mark Simon (mark.simon)
#10 ranked lender in Delaware - 83 contributions

What state are you relocating to ? Give me a call and we can help expedite the process of financing your new home.Mark 800-485-1387 Extension 107

Jun 11th 2012
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