Be careful renting out a home if you finance through a loan backed by the Federal Housing Administration. An FHA loan is meant to help people find homes to live in. It’s not supposed to help people purchase income properties. The agency prohibits homeowners from taking advantage of their program in order to build an investment portfolio.
Of course, that doesn’t mean it’s never allowed. The agency specifically outlines rules. For example, if you have to relocate to a new place outside of a reasonable commute to work, FHA may allow you to rent out a home financed through a loan backed by the agency. Additionally, if you have more children than your current house has room for, FHA makes an exception. Regardless though, you’d need to live in the home for most of the first year before considering renting it.
If you choose to rent out the home and they allow it, they might require you to wait to move out until the loan-to-value ratio is 75 percent. They might require a new appraisal too. Alternately, the agency might allow you to pay the loan down to that LTV in advance in order to move forward with rental plans if your family size grows.
Simply put though, the agency is aware than people may try to buy a home using an FHA loan with the intent to use it as a rental property and have provisions in place to make sure that doesn’t happen.
Are You Buying a Home on Marco Island?
Considering buying a home on Marco Island? We’d love to help you find one that’s just right for your needs.
Call us at 239-821-7926 or get in touch with us online to let us know what you’re looking for. We’ll start searching right away. In the meantime, please explore our:
- Marco Island homes for sale from $100k to $200k
- Marco Island homes for sale from $200k to $300k
- Marco Island homes for sale from $300k to $400k
- Marco Island homes for sale from $400k to $500k
- Marco Island homes for sale from $500k to $600k
- Marco Island homes for sale from $600k to $700k
- Marco Island homes for sale from $700k to $800k
- Marco Island homes for sale from $800k to $900k
- Marco Island homes for sale from $900k to $1 million
- Marco Island homes for sale over $1 million
