FHA Borrowers Can Change Their Minds

November 29, 2010

“I am thinking of refinancing into an FHA loan in order to take some cash out for home improvement.  My intent is to stay in the house, but there is a possibility that I may need to move out in 7 months or so and rent this house before moving back in at a later time.  Can I do this?” 

FHA loans are for permanent occupants, not investors. However, people are allowed to change their minds in response to changed circumstances, so if  you are obliged to rent it out at some point, nobody is going to throw you in jail. In my view, the fact that you anticipate that this could happen does not invalidate your declaration that you are buying the house as your permanent residence.

Note that the loan application does not ask you about possible future changes in your lifestyle and there is no reason for you to bring it up.

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