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We currently have a mortgage on our first home and are considering buying a second home to use as a group home. Could anyone share more information on the rules considering a group home a principal residence.? Thanksgivings
We currently have a mortgage on our first home and are considering buying a second home to use as a group home. Could anyone share more information on the rules considering a group home a principal residence.? Thanksgivings
You need to check with the codes department of your city. They are not allowed in various zoning designations in certain areas.
Last edited by BirdieBelle; 12-05-2013 at 07:14 AM..
Reason: typo
We currently have a mortgage on our first home and are considering buying a second home to use as a group home. Could anyone share more information on the rules considering a group home a principal residence.? Thanksgivings
The term "second home" has two meanings. Are you going to live in the new home? Do you have a child that is going to live in the new home? Who is going to live in the old home?
My husband and kids would live in the current home. And an employee and myself would be splitting our time living at the new home caring for the elderly adults that would be living there .
I doubt a underwriter will count it as a primary residence , but it doesn't matter what I think. Just because you spend a lot of time there doesn't mean it is a primary residence.
It could possibly be suitable as an investment purchase......as long as it's not a transient type hotel environment and within code for the area. If there are going to be elderly living there, they would need to sign a long term lease (that can be broken for many reasons) to satisfy residential underwriting. The underwriters will use their own calculations for the rent and you could not take title in a business name.
The more I type it out, the more "SBA" comes to mind.
Yeah, I can't imagine a mortgage for a group home being allowed to get primary residence rates on a mortgage. An investment property is a possibility with an investment property loan. But honestly, what it sounds like most to me is a commercial purchase with commercial lending rules.
And, as previously mentioned, do your research before you buy. Not only will some building zones not allow this as a use, but I would have to assume that it would be against most CCRs if you buy in a subdivision.
The term "second home" has two meanings. Are you going to live in the new home? Do you have a child that is going to live in the new home? Who is going to live in the old home?
Quote:
Originally Posted by SmartMoney
I just recently started to research this for someone, from the Fannie guide:
The following table describes conditions under which Fannie Mae considers a residence to be a
principal residence even though the borrower will not be occupying the property.
Borrower Types Requirements for Owner-Occupancy
Multiple borrowers Only one borrower needs to occupy and
take title to the property, except as otherwise
required for mortgages that have guarantors
or co-signers. (See B2-1.2-04, Continuity of
Obligation.)
Parents wanting to provide housing for their
physically handicapped or developmentally
disabled adult child
If the child is unable to work or does not have
sufficient income to qualify for a mortgage
on his or her own, the parent is considered the
owner/occupant.
Children wanting to provide housing for
elderly parents
If the parent is unable to work or does not have
sufficient income to qualify for a mortgage
on his or her own, the child is considered the
owner/occupant.
Note: If a property is used as a group home, and a natural-person individual occupies the
property as a principal residence or as a second home, Fannie Mae’s terms and conditions
for such occupancy status as provided will be applicable.
You most likely will need someone that can take you Fannie Direct (ie, no overlays) -
I'm interested in learning more information on the group home guidelines on the note a the bottom of this post. I could not find them on the pages listed.
I'm interested in learning more information on the group home guidelines on the note a the bottom of this post. I could not find them on the pages listed.
Well, you are likely sitting at a computer. Look it up. JFC.
Page 269 and 270 describe residence type and just touch on group home it is now about group home. If you want it as a primary residence , move your whole family there, if you don't want to more your whole family there, it isn't a primary residence, it is just a place you work and spend most of your time.
Buying it as a second home is out of the question
Either save enough for a investment mortgage or look into an SBA loan.
I think you are trying to use the program not what it was intended for.
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