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HUD Guidelines on FHA Loans After Divorce
I am going through a divorce, and the last piece is buying my spouse out of the home. I have lived off-site since we started the process. I was about to close a loan to pay off my spouse, but the loan stalled as the lender stated I had to have lived there for at least 12 months. The home is paid for, so I would functionally take out a first mortgage. I have been unable to find anything other than I must occupy the home within 60 days of closing. Does this sound like lime? Lender rule, or am I missing something? The FHA guidelines?
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3 Replies
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I understand your pain, but let me say this – FHA occupied Loans are straightforward – Here are some essential things to keep in mind:
Occupancy Requirements: FHA mortgage policies usually state that the buyer must live in the property as their primary dwelling within 12 months from the closing date. This means that as long as the house is meant to be the owner’s principal residence after the closure, he/she can purchase it even if occupied for less than 12 months.
Lender Policies: In this context, a lender can also decide to have internal policies that are more detailed and overreaching than the aggregate HUD guidelines. The 12-month period of occupying the house before occupancy is a point of the bank’s internal policy rather than the strict provision of HUD.
Documentation: If you feel you have some issues with the lender, you can ask the supported company for an explanation of the reason and the policies relative to them. Similarly, a case can be presented in which a letter was written stating why intending to occupy the presented property in the future was required.
Consulting a Professional: If the suggestions above do not alleviate your predicament, it is advisable to contact a mortgage broker or a solicitor specializing in real property. They can provide advice concerning the particular application and clear the path to the requirements.
However, you may require the most correct and up-to-date guidelines regarding occupancy requirements. In that case, you can directly consult the FHA guidelines on their official web page: HUD Guidelines.
The lender needs to consider a misconception or a further condition. You should address these issues with them.
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What documentation would satisfy the lender’s 12-month residency requirement?
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To fulfill the residency condition of a lender for 12 months, the borrower may submit the following documents
Proof of Residency.
Utility Bills Must have been in the borrower’s name and at the physical address where the property is located for at least 12 months prior to the application.
Lease Agreements—If you were living on rent elsewhere, you would need other copies of lease agreements from last year.
Bank Statements: Documentation that includes an address for the last period of about 12 months.
Tax Documents.
Tax Returns: You may have submitted taxes stating the particular property as your residence. If so, attach your tax returns that you wholly filed.
Government Correspondence.
Official Mail—Any notices that were intended for you through the government, such as tax notices, should be addressed to you at the property.
Affidavit.
A declaration executed by the borrower with a notarized stamp indicating the whereabouts of the borrower witness signed by two distinct persons indicating the absence of a borrower in the stated home for the mandatory duration, together to move into the home.
Letter of Explanation.
It may include a letter that describes the situation in detail, the issue of the divorce, and a detailed description of the plan for how and when the borrower will be occupying the home.
Employment Records.
Invoices from the employer regarding work that required the borrower to be based in another location, including the work location and the location of bases, may suffice.
It is advisable to confirm with your lender to ensure they will accept these pieces of documentation before sending in any supporting documentation. Each lender might have specific preferences or even additional requirements.
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