Hi, it’s Tom Heath with the Mortgage Guidance Group at Nova Home Loans. This is our weekly installment of Mortgage and Real Estate Related Matters. Today’s topic is that Post-Purchase Leaseback. In this market, we’re seeing sellers asking to remain in the home for a period of time after closing, so they can find a home to purchase. This is a result of a very busy market, and sellers don’t want to be left in the lurch, trying to find a place to purchase once they’ve sold there’s.
Leasebacks are fine, in most cases, you just have to be very careful of the type of loan that the buyer is getting. If they’re using this home as a primary residence, if it’s a subject property, they must occupy it within 60 days. So if your leaseback is beyond that 60-day period, your underwriter will have an issue with that.
Obviously, if it’s a rental property, you have no concerns and if it’s a second home, talk with your loan originator. Different lenders are going to have different philosophies on this, but in general, a second home should not be used for rental income. A short period of time might be acceptable, but a longer extended period certainly could be a challenge.
As always, stay in communication with your loan officer if you have unique situations or something you haven’t worked through before. If you have any questions, you can find us on our new website, MGGroupTucson.com. Feel free to give us a call, check us out, and always send us a note if you would like us to cover a topic in one of our weekly videos. Thanks so much!