FHA loan rules have requirements for both U.S. residency for potential borrowers, and occupancy for approved borrowers. Did you know that HUD 4000.1 states that an FHA loan applicant does not have to be a U.S. citizen in order to apply for an FHA mortgage or refinance loan?
U.S. citizenship is not required, but legal documentation showing the applicant's status will be a condition of loan approval. The FHA loan program is open to both non-permanent resident aliens and lawful permanent resident aliens. The FHA loan rules also instruct the lender, "Non-U.S. citizens without lawful residency in the U.S. are not eligible for FHA-insured Mortgages".
While all borrowers are required to show proof of a Social Security Number, this cannot be used to prove immigration or work status, according to HUD 4000.1:
"The Mortgagee must determine the residency status of the Borrower based on information provided on the mortgage application and other applicable documentation. In no case is a Social Security card sufficient to prove immigration or work status".
Once a borrower has provided the proper documentation needed by the lender, and is approved for the FHA mortgage or refinance loan, there will also be the FHA occupancy requirement which must be met:
"At least one Borrower must occupy the Property within 60 Days of signing the security instrument and intend to continue occupancy for at least one year". If there is only one borrower, that person must meet the FHA loan occupancy requirement personally.
Borrowers who have applied for FHA 203(k) rehab loans may have different requirements (different projects may involve different completion timelines), so it's important to know how and if they apply to you.
Talk to your loan officer about occupancy requirements based on your specific needs under the 203(k) rehab loan project to see what may apply with the fixes or improvements to be made with the loan.
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