Bank is refusing to release funds on a FHA loan for a duplex that is currently tenant occupied.
The tenants are currently month to month but the county requires proper protocol be followed for owners to recover possession.
Any negotiations such as cash for keys or notice to vacate are heavily regulated in my county and can only be initiated by the owner. The problem is that I’m not the owner. This is all confirmed by my attorney who would help me gain possession of a unit once the deal closes.
The underwriters want evidence that I intend to move in within 60 days but I can’t start that process until I’m the owner. I’m stuck. Is there anything I can do to save this deal?
Posted by Nemiulabs
5 Comments
Loop the seller (current owner) into the problem and have them do cash for keys or whatever they can, then reimburse them what it costs to do that.
That’s a classic catch-22 with FHA owner-occupancy requirements – they want proof you can move in but you literally can’t start the eviction process until you own it
Have you tried getting a letter from your attorney explaining the legal timeline and confirming they’ll handle the possession process immediately after closing? Sometimes underwriters will accept that as intent documentation
I’m sorry you’re going through this. A better agent would have warned you that since FHA requires owner occupancy, you should look at properties with a vacant unit, or insist on a unit vacant at closing (making getting a tenant out their problem).
Dont buy it. The occupants can destroy the place, and unless you have absolute proof that it wasn’t damaged before. Your stuck with the expense to repair. Also you would have to do eviction notice and that can cost more time and money!
FHA loans are for owner occupied homes….switch to another low down payment loan. I’d also switch lenders altogether as they should have told you this.