| FHA Loan Programs |
What is principal residence?
A principal residence is a property that will be
occupied by the borrower for the majority of the calendar year.
At least one borrower must occupy the property and sign the
security instrument and the mortgage note for the property to
be considered owner-occupied. Our security instruments
require a borrower to establish bona fide occupancy in the
home as the borrower's principal residence within 60 days
after signing the security instrument with continued occupancy
for at least one year. To prevent circumvention of the
restrictions on FHA-insured mortgages to investors, we
generally will not insure more than one mortgage for any
borrower. Any person individually or jointly owning a home
covered by a mortgage insured by FHA in which ownership is
maintained may not purchase another principal residence with
FHA mortgage insurance except under the situations described
below. Properties previously acquired as investment
properties are not subject to these restrictions. FHA will not
insure a mortgage if we conclude that the transaction was
designed to
use FHA mortgage insurance as a vehicle for obtaining
investment properties, even if the property to be encumbered
will be the only one owned using FHA mortgage insurance. We
do not object to homebuyers using FHA mortgage insurance
more than once if compatible with the homebuyer’s needs and
resources as follows:
occupied by the borrower for the majority of the calendar year.
At least one borrower must occupy the property and sign the
security instrument and the mortgage note for the property to
be considered owner-occupied. Our security instruments
require a borrower to establish bona fide occupancy in the
home as the borrower's principal residence within 60 days
after signing the security instrument with continued occupancy
for at least one year. To prevent circumvention of the
restrictions on FHA-insured mortgages to investors, we
generally will not insure more than one mortgage for any
borrower. Any person individually or jointly owning a home
covered by a mortgage insured by FHA in which ownership is
maintained may not purchase another principal residence with
FHA mortgage insurance except under the situations described
below. Properties previously acquired as investment
properties are not subject to these restrictions. FHA will not
insure a mortgage if we conclude that the transaction was
designed to
use FHA mortgage insurance as a vehicle for obtaining
investment properties, even if the property to be encumbered
will be the only one owned using FHA mortgage insurance. We
do not object to homebuyers using FHA mortgage insurance
more than once if compatible with the homebuyer’s needs and
resources as follows:
- Relocations. If the borrower is relocating and re-
establishing residency in another area not within
reasonable commuting distance from the current
principal residence, the borrower may obtain another
mortgage using FHA insured financing and is not
required to sell the existing property covered by a FHA-
insured mortgage. The relocation need not be
employer mandated to qualify for this exception.
Further, if the borrower returns to an area where he or
she owns a property with an FHA-insured mortgage, it
is not required that the borrower re-establish primary
residency in that property in order to be eligible for
another FHA insured mortgage.
