Forgotten Your Password?

Need to Register?

Question Icon

Can I rent my home after FHA streamline refinance?

Applied for a streamline finance several months ago. After applying for the refi, a couple wanted to buy our house. Problem is, they are going to have to rent for about a year to fix a credit situation. Currently I have a signed purchase contract with a 1 year lease. We still live in the house, but are in the process of buying another house. Should I just stop the refi before I close? by kevina_960_173 from Georgetown, Kentucky. Nov 15th 2012 Reply


Joel Lobb (kentuckyloan)
#3 ranked lender in Kentucky - 192 contributions

I do a lot of business in Scott County Ky. Email me below . Thanks Kevin. Joel Lobb (NMLS#57916)Senior Loan Officer502-905-3708 cell502-813-2795 faxjlobb@keyfinllc.comKey Financial Mortgage Co. (NMLS #1800)*107 South Hurstbourne Parkway*Louisville, KY 40222*http://mylouisvillekentuckymortgage.com

Nov 15th 2012
1
0
Travis Torcoletti (travis.torcoletti)
#0 ranked lender in South Carolina - 372 contributions

This is confusing....are you doing a refi or buying another house to live in? If you are doing a FHA streamline refi right now then you are agreeing to stay in that home as your primary residence for at least one year. If you simultaneously are attempting to buy another house and have stated that the one you are buying will be your primary residence then you are commiting mortgage fraud, you cannot have two primary residences.

Nov 15th 2012
1
0
William J Acres (William_Acres)
#73 ranked lender in Arizona - 8,726 contributions

If you marked the box "owner occupied" when you first applied for the mortgage, and now you're saying that it's going to be an investment, then you need to inform your lender that your scenario has changed... you can still streamline an investment property, but not every lender does them... if your lender finds out that you are purchasing a new home (which they will once you give them an explanation regarding your credit inquiries on your credit report), and you didn't tell them of your intent to purchase a new home, they will turn down your streamline.. and they could go one step further and make notations in FHA's automated underwriting system so that any other future lenders looking at your refinance request can see why you were denied previously... it's best to tell them now, and see if the lender allows investor streamlines.. if they don't, then they will turn down your loan, but you can still find another lender that is willing to do streamline's on investment properties... the pricing will be slightly higher, but it is available... 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

Nov 15th 2012
1
0
Phil Dumouchel (PhilDu)
#32 ranked lender in South Carolina - 2,240 contributions

Really depends on how the process is set up. I'd make sure your costs are very low. There's no guarantee that the couple will be able to buy at the end of the year. If they can't alower rate and payment will be helpful. You do have to disclose any change in your circumstances prior to closing to the lender or it could be considered "fraud".

Nov 15th 2012
0
0

I have a signed contract for purchasing another house as well as a purchase/lease contract on my current house. I informed my refi lender of the situation and they said it would be okay to proceed with the refi. I will probably close the refi and then close the new mortgage the following week. I'm a little concerned about this. I'm not attempting to be fraudulent. I just want to make sure if have done everything I'm supposed to do.

Nov 15th 2012
0
0
Derick Condron (rightstartoregon)
#32 ranked lender in Oregon - 598 contributions

If you are doing a Streamline you can do the current home as a non occupying home and there is a pricing hit for that. In your case that would be the way I would have it set up to be safe that there is no fraud, sounds like you have disclosed everything to the lender just make sure the 1003 shows as you do not intend to occupy the home

Nov 15th 2012
0
0
Phil Dumouchel (PhilDu)
#32 ranked lender in South Carolina - 2,240 contributions

As long as you disclosed it you are fine. It is possible/allowed to do a FHA streamline on a property that you will not occupy but not all lenders are able to offer that option.

Nov 15th 2012
0
0
William J Acres (William_Acres)
#73 ranked lender in Arizona - 8,726 contributions

Let me reiterate that you are allowed to refinance an FHA loan using the streamline process in your scenario. The maximum loan amount is different for investor refi's vs. owner occupied, since they don't allow unpaid interest to be financed, so you'll have to come to the table with a little more money, but FHA will allow it... and so will a lot of other lenders... If you were purchasing a new home using FHA, then it's must be your primary residence, but if you have an FHA loan now, and it's no longer your primary, you can still refinance it using FHA's streamline process... if you have informed your lender, then you have done your due diligence... hopefully you sent them either something in writing or an email.. you will want to have something to back up the fact that you informed them that you're not living in the home that's encumbered with an FHA insured loan in case it's questioned in the future... 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

Nov 15th 2012
0
0

I have saved all my email communications with Wells Fargo just in case. My new loan will be a VA loan through a different lender, so I won't have 2 FHA loans. I have seen a lot of information concerning mortgage fraud and don't want any part of that.

Nov 15th 2012
0
0
Phil Dumouchel (PhilDu)
#32 ranked lender in South Carolina - 2,240 contributions

Good plan, you should be fine - but a good idea to hang onto the emails just in case. VA loans are about the best options out there - I almost always recommend that option to my customers who are eligible. Good luck, let me know if I can help.

Nov 15th 2012
0
0
William J Acres (William_Acres)
#73 ranked lender in Arizona - 8,726 contributions

If you have informed Wells, then you have done your part... Also note, that you cannot get 2 FHA mortgages in your scenario.. This is the section of HUD's 4155.1 handbook referencing investment properties... "4155.1 4.B.4.c Underwriting Considerations on Investment Properties"... copy and paste this into a web browser, and you will see for yourself.. you're not doing anything illegal... 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

Nov 15th 2012
0
0
Wayne Thompson (WayneThompson)
#14 ranked lender in Kentucky - 6 contributions

You have been given good advice. Just make sure that when you sign the FHA addendum and the 1003 (loan application) it specifically says you this is not your primary residence and that you do NOT intend to occupy the house. Otherwise any verbal conversations are not worth much in court.Also if you are confident the renters are going to be able to buy in a year I was seriously look at wther a refinance makes sense. Closing cost would probably be more than your savings for a year unless you have a high rate. Just because the lender may be adding them to the loan amount that doesn't mean you are not paying them. It means you will owe that much more in a year.

Nov 15th 2012
0
0
Travis Torcoletti (travis.torcoletti)
#0 ranked lender in South Carolina - 372 contributions

FHA loans are for primary residences only...if you do not intend to occupy the house you are doing the FHA streamline loan on then you should not follow through on it. Whoever is doing that refi for you probably just doesn't want to lose the loan, therefore the money they would have earned. When you attempt to get a loan for the home you have a contract on now the underwriter will see your FHA loan and the refi you just did. So unless you plan on specifying the home you are intent on purchasing as an investment property or second home then you might have a serious issue. Rates are different on investment and second homes, the best rates are reserved for primary residences.

Nov 15th 2012
0
1
Subscribe to our news feed.