I couldn't stay at my current job & had to look for other work. So as some of you know - my hubby & I relocated to Omaha from Northern California.

We can't sell our house in Cali as it is upside down - so we rented it out.

Apparently this is a non-monetary default under the provisions of our Deed. We have a CalHFA loan which requires (as I'm just now finding out) that we live in the home for the duration of our loan (or until we sell).

According to the nasty-gram we received - they may allow us time to market the property or obtain new financing. 1) we can't sell it & 2) who's going to finance it if it's upside down?

I'm freaking out a bit. Waiting for a call back & have no idea what to do.

So, right now the loan is being paid as agreed...but because you don't occupy it they will foreclose...and have an upside-down house.

Just. Stupid.

Sorry, that wasn't helpful. Best of luck to you in figuring it all out...would they consider a short-sale?

How did they find out?

I understand they have their rules so they can choose from the following: full on time ongoing payments, short sale, or foreclosure. Their pick.

Could you refinance it into rental property? I know not a great option, but you might have to consider it.

And yes - how did they find out? Change of address?

The provision exists to prevent people from using FHA loans to purchase properties for the purpose of rental. In other words, to prevent a landlord from using FHA to create more rental properties. This is hardly the case for you and it would be ridiculous for them not to grant an exception. You may have to find a non-bureuacrat to talk to that can see beyond the paragraph in front of them.
Good luck

They found out because of my address change & I updated the insurance to list the house as a rental - I thought I was doing everything correctly - I didn't realize the type of loan I had, had those restrictions.

I have made on-time payments for 8 years. It would be crazy for them to have me short sale/foreclose it & not let me rent it out.

I get the idea of preventing abuse of the program - but like Bankbb1 said - totally not my case.

So just pray I get a good person to talk to. I love that little house & we really want to keep it. Here I am one of the "good guys" & I'm getting the shaft.

Maybe I should stop making payments - get to keep the house for 2 years for free - collect rent so actually move ahead in the game - & then they'll let me finally refinance at a lower rate ...

Isn't that how it works for everyone else?

{{HUGS}}

And if you don't get a 'good' person to talk to, take it up the food chain until you do. It really can work. Remember, only higher ups have the ability to grant exceptions.

True story: A few years back a raccoon tore a hole in my roof to get in the eaves to make a nest. In over 20 years with one BIG insurance co, we'd filed one claim for a lost hearing aide and another for a lost piece of jewelry both covered by special riders. Yet this third claim caused the insurance company to decide not to renew our policy at the next anniversary. Of course, once your insurance has been cancelled, no other company will touch you, which would have given my bank the right to call the mortgage due. I kept calling till I got to the National Regional manager level. My deductible was increased and the insurance renewed. And I got to keep my mortgage and house.

You're Wonder Woman...you CAN do this!

So good news ...

I finally got a hold of someone & she says that CalHFA will typically approve the waiver & let me rent the house - I just have to fill out a form every year proving I have a renter, proving I have insurance, & proving I'm current on my payments.

That is good news!!

yea!!! That's got to be a HUGE relief to you.

Sa-Weet!!

I was going to suggest arson. Never mind.....

Considering my little brother's house just burned down (don't worry - all is OK) - I would think if mine burned down too there may be a deeper investigation!

Dear lord it sure has been a year for my family - I was waiting for when it was going to be "my turn" ... I'm still not convinced all is well until I get the final approval.

Common sense from a government agency? That doesnt make any sense.


Good news WW!