Whether youre a first-time homebuyer, moving to a new home, or want to refinance your existing conventional or FHA mortgage, the FHA loan program will let you purchase a home with a low down payment and flexible guidelines.580 Credit Score- and only -3.5% Down RELATED ARTICLES
FHA loan limits were established to define how much you can borrow for a HUD-backed mortgage. Each state has different limits, so be sure to look up your state to understand what is available for your FHA home loan.
For , the FHA floor was set at $498,257 for single-family home loans. This minimum lending amount covers most U.S. counties. The FHA ceiling represents the maximum loan amount and is illustrated in the table below.
Also for 2024, the FHA ceiling was set at $1,149,825 for single-family home loans. This represents the highest amount that a borrower can get through the FHA loan program. It applies to high cost areas in the United States and is illustrated in the table below.
Paying the upfront costs of buying a new home can be challenging. To help overcome this hurdle, many local and state agencies offer down payment assistance in the form of grants or second mortgages.
Purchasing your first home is an exciting milestone! As a first-time homebuyer, you may be considering an FHA loan due to their low down payment requirements and relaxed credit standards. FHA loans allow homeownership dreams to become reality for many buyers. However, FHA home loans do come with certain occupancy requirements you’ll need to meet to qualify.
In this comprehensive guide, we’ll explain FHA primary residence rules, outline qualifications and provide tips for navigating the process smoothly. Read on to learn everything you need to know about FHA loan requirements for owner-occupied homes.
FHA loans are government-insured mortgages backed by the Federal Housing Administration (FHA). This federal agency is part of the United States Department of Housing and Urban Development (HUD).
The major benefits of FHA loans include
As government-backed loans, FHA mortgages provide an affordable home financing option for buyers who may not qualify for conventional mortgages.
FHA loans require you to use the home as your primary residence. This means you must move into the property within 60 days of closing and occupy it as your main home.
You’ll need to live in the house for at least 12 months. FHA loans are not permitted for vacation homes or investment properties. There are a few exceptions we’ll outline later.
The primary residence occupancy rules help ensure FHA mortgages assist homebuyers, which is the purpose of the program. The government wants to aid borrowers in purchasing homes to live in long-term, not houses to rent out or flip for profit.
When applying for an FHA loan, you’ll need to sign a legally binding occupancy certification. This verifies you’ll move into the home as your primary residence within 60 days and occupy it for a minimum of 12 months.
You’ll also need to prove you intend to meet FHA’s owner occupancy terms. Lenders evaluate this in a few key ways:
Show a clear housing need
Be prepared to explain why you are purchasing the home. This shows you intend to reside there versus using it as a rental property or second home.
Prove no other primary residence
You cannot have an existing primary home elsewhere. The lender will check public records and require documentation to confirm owner occupancy of your current residence if you have one.
Get a home inspection
Electing to get a home inspection demonstrates you plan on living in the house long-term. Investors usually waive this contingency.
Inspect the property
Visiting a property in-person shows intent to occupy. Document walk-throughs and visits in writing for your lender.
Customize the home
Asking for certain repairs or renovations to be completed before closing indicates you plan to make the home your own.
Secure homeowners insurance
Purchasing enough homeowners insurance coverage for a primary home residence shows you plan to live there long-term.
List current home for sale
Listing your current house for sale proves you do not intend to keep it as a rental or second home after purchasing the new property.
Provide a letter of explanation
If there are any extenuating circumstances that make your situation unclear, offer your lender a written explanation.
Intending to use the home as an investment property but claiming it as your primary residence to obtain an FHA loan constitutes mortgage fraud. This violates federal law.
If you fail to move into the home within 60 days of closing or don’t live there for at least 12 months, the consequences can be severe. They include:
Basically, don’t take FHA occupancy requirements lightly! The fallout is harsh, and simply isn’t worth the risk.
The FHA does allow for a few rare exceptions to their owner-occupancy requirements:
Unless you have circumstances that clearly fit one of the above categories, you likely won’t get approved. The FHA strictly enforces their primary home loan requirements.
Follow these tips to prove you’ll meet primary residence requirements when applying for an FHA mortgage:
Taking these actions will help confirm you intend to live in the home as your primary residence throughout repayment term.
As you navigate FHA loan requirements, it’s essential to work with a lender experienced in these mortgages. Here’s what to look for when choosing:
The right FHA loan officer will guide you through occupancy requirements smoothly and set clear expectations. Don’t be afraid to ask candidates plenty of questions before deciding who to trust with your important transaction.
With a trusted lender at your side explaining requirements, there is absolutely no reason you can’t be next! Just stick to the guidelines outlined here. Stay in frequent contact with your loan officer throughout the process.
Before you know it, you’ll have the keys to your very own FHA home, ready for move-in day! We wish you the best of luck with your upcoming purchase and can’t wait for you to embark on this exciting journey into homeownership.
Find out why FHA mortgages with low down payments are so popular with homebuyers.
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Whether youre a first-time homebuyer, moving to a new home, or want to refinance your existing conventional or FHA mortgage, the FHA loan program will let you purchase a home with a low down payment and flexible guidelines.580 Credit Score- and only -3.5% Down RELATED ARTICLES
FHA loan limits were established to define how much you can borrow for a HUD-backed mortgage. Each state has different limits, so be sure to look up your state to understand what is available for your FHA home loan.
For , the FHA floor was set at $498,257 for single-family home loans. This minimum lending amount covers most U.S. counties. The FHA ceiling represents the maximum loan amount and is illustrated in the table below.
| FHA Limits (low cost areas) | |||
| Single | Duplex | Tri-plex | Four-plex |
|---|---|---|---|
| $498,257 | $637,950 | $771,125 | $958,350 |
Also for 2024, the FHA ceiling was set at $1,149,825 for single-family home loans. This represents the highest amount that a borrower can get through the FHA loan program. It applies to high cost areas in the United States and is illustrated in the table below.
| FHA Limits (high cost areas) | |||
| Single | Duplex | Tri-plex | Four-plex |
|---|---|---|---|
| $1,149,825 | $1,472,250 | $1,779,525 | $2,211,600 |
Paying the upfront costs of buying a new home can be challenging. To help overcome this hurdle, many local and state agencies offer down payment assistance in the form of grants or second mortgages.
How long does FHA require primary residence?
The FHA typically requires borrowers to occupy the property they’re buying and use it for their primary residence for at least one year . By FHA standards, a primary residence is one in which the owner occupies the property for the “majority” of the year.
What is the FHA 60 day occupancy policy?
FHA policy for occupancy requires at least one borrower obligated on the mortgage to take up residence in the home as the primary residence . This must happen within a “reasonable time” of loan closing, normally 60 days, unless you make other arrangements with the loan officer.
Can you rent your FHA home after 1 year?
Yes. Providing that you used the FHA Mortgage to purchase your primary residence, and provided you then moved into the primary residence and lived there for a reasonable amount of time. The amount of time would be a matter of opinion, but at least one year would likely be considered reasonable .
How long do you have to live in an FHA home before selling it?
There are certain exceptions to the rule you’re about to read, but in general FHA borrowers should know that homes resold 90 days or less after purchase cannot be financed with an FHA mortgage loan. That does not restrict the owner from trying to sell, but it does restrict the borrower who wants to buy.
What does FHA consider a ‘principal residence’?
FHA loan rules state the borrower applying for a new purchase single family residence must use that residence as the primary occupant or as the “primary residence”. But what does the FHA consider a “principal residence” or “primary residence”? Can the FHA approve a second FHA mortgage for those who purchase single-family, owner-occupied property?
What are the requirements for an FHA loan?
FHA loans have a set of requirements you must meet in order to qualify for an FHA loan. These include: The home must be your primary residence. You must have a minimum credit score of 500 (though most lenders require 580+).
Do FHA loans require occupancy?
There are often questions potential borrowers have regarding FHA loan requirements for occupancy. Some borrowers may wish to purchase a home with the idea they will become landlords of that property. FHA regulations for single family homes to be purchased with an FHA mortgage have occupancy requirements that prevent this.
How do I qualify for an FHA mortgage?
The basic requirements to qualify for an FHA mortgage include: Verify your FHA loan eligibility. Start here Credit score of 580: You need a FICO score of 580 or higher with a down payment below 10 percent. You could get approved with a FICO score as low as 500 if you can make a 10% down payment (though many lenders don’t allow this)