Fha loan question regarding owner occupancy?

I have owned my home and lived there for 11 years. In May of this year my father past away leaving me his home out in the country. I painted and worked on making my house buyer friendly and placed a sign in the yard for sale by owner. I thought nothing of it. My house is empty and is for sale at this time. I have no intentions of renting it or doing land contract. I know that is against FHA regulations and have no interest in do that anyway. So today I get a letter in the mail from US Bank that says my home has to be occupied by me for the life of the loan and it must be my primary residence. I remember being told I cannot sell for 10 years and it has been more than that. I am not renting it and no person lives there right now. I cannot understand these terms. So what do people do if they have to move due to a job relocation or like in my situation inherited a home? I cannot live in 2 houses and have no desire to sell the home that belonged to my father. Am I not allowed to sell my house? They sent me a property affidavit and a nasty warning saying they will enforce rules of the loan. Do I have to live there until the day of the sale? This is just absurd.
My father’s home has already been deeded to me and the probate process was quick due to him having a will in place. So I own 2 homes.
And I was told in 1999 when I purchased the home that I could not sell for 10 years or I would owe a percentage to them as a penalty. I have passed that amount of time. This is awful. I have had enough to deal with these last couple months. Now this??

3 Responses to “Fha loan question regarding owner occupancy?”

  1. Bob Says:

    The verbage regarding occupancy on an FHA mortgage is the same now as it was 11 years ago:
    "Borrower shall occupy, establish and use the Property as Borrower’s principal residence within sixty days ….and shall continue to occupy the property and borrower’s principal residence for at least one year after the date of occupancy "….
    It also says "lender can take reasonable action to protect and preserve vacant and abandoned property."
    It’s hard to imagine it could be considered abandoned if you have maintained the property and have it actively listed for sale. You definitely are NOT obligated to occupy the home as primary residence for ten years and there are even provisions to protect you if circumstances beyond your control force you to move out in less than a year. You are required to keep up your payments, insurance and condition of the property.
    Call your lender and make sure they know what you are doing (and confirm it in writing). Maybe they sent you some mail that got returned because you weren’t there and they got spooked. Get an attorney if they don’t call off the dogs. The contract is clearly on your side.

  2. realtor.sailor Says:

    The home, as per the mortgage, must be occupied by the owner-occupant. Apparently US Bank feels your home is vacant and as such they have the right to secure the home if they feel it isn’t being maintained. I doubt this has nothing to do with your father’s home, which must be probated. You need to notify US Bank that your home is being maintained. They do not need to know it’s for sale, just being maintained.


  3. GI Jane Says:

    They may be under the impression you’re renting it out or letting it go. You should invite someone from your lenders office to do a walk through to verify that is not the case, you are taking care of it and it’s up for sale. Just call them, explain your situation.
    You may want to consider getting an agent to help you sell, it will likely help get the bank off your back… Plus agents can help sell a home much quicker than DIY..
    Other option is refinancing to a conventional loan, then you can do whatever you want with it, rent it, sell it, live in it, leave it empty – what have you..
    Good luck… and I agree, it is absurd. I could see their argument if you’ve only had a loan w/them a few months, but 11 years of making mortgage payments and that’s how they treat you? geeez…
    And no, it doesn’t mean you have to live there, just means you have to be taking care of the property and not have another mortgage per your income the loan was originally based on..