I’ve wondered about that, too—especially with RHS loans, since they’re supposed to be for “primary residence” only. But what actually counts as a valid exception? If your job suddenly moves you across the state, does that qualify, or do you have to sell right away? I’ve heard stories about people renting out their place for a bit and hoping nobody checks, but that feels risky to me. Has anyone actually had the lender follow up on their living situation, or is it more of an honor system unless someone reports you?
I’ve heard stories about people renting out their place for a bit and hoping nobody checks, but that feels risky to me.
I've seen folks try that, and honestly, it's a gamble. I had a client who got transferred for work and wanted to keep her RHS-financed house as a rental. She called the servicer first—turns out, they were pretty strict. They gave her a short grace period to sell, but renting it out was a no-go. I’ve also heard of people flying under the radar, but if the lender finds out (sometimes through neighbors or mail returns), it can get messy fast.
Curious if anyone’s actually been audited or had to show proof of residence? Or is it mostly just paperwork at closing and then radio silence?
I’ve always wondered about the actual enforcement, too. I’ve used DPA programs before (not RHS specifically), and after closing it was mostly crickets unless you missed a payment. I’ve heard of random occupancy checks, but never experienced one myself. Maybe it depends on the lender’s mood or how nosy your neighbors are?