Hard money lenders Los Angeles can help you bridge the gap that’s sometimes left between purchasing a new house and selling your old one. Of course, it’s important to understand all the requirements of a hard money loan before you apply, just like it’s essential that you understand the terms of your mortgage.

When it comes to property, there are many different financing routes you can take, but some are meant for certain purposes. For example, owner occupied loans are meant for individuals who intend to live on the property. If you’re shopping around for financing, you need to find out if the perimeters of a loan fit your needs and future plans.

How Is an Owner Occupied Loan Different From Other Kinds of Financing?

When lenders approve owner occupied financing, they typically place restrictions on how the property can be used. For example, most lenders don’t allow owners to rent out the property for a specified length of time.

You’ll also need to take up residence within a certain amount of time and live there for a designated time period. The details may vary by loan type and lender, just as the terms of a residential hard money loan vary by offer.

How Soon Must You Occupy When Using a USDA Home Loan?

A loan from the United States Department of Agriculture usually has very strict rules about who may occupy the property. Typically, only the borrower and immediate family may take up residence, although there are a few exceptions:

  • Non-biologically related adopted children, so long as their presence doesn’t cause overcrowding and the parents don’t claim income from them
  • Exchange students, as long as the family isn’t being compensated
  • Caretakers, if a disabled child or adult requires constant care

Once you’re approved, you must occupy the property within 60 days of closing and you may not rent until the loan is paid off.

How Soon Must You Occupy When Using a VA Loan?

Veterans face a unique challenge when it comes to occupancy requirements, as active military members often have to change location. To accommodate this, the Veterans Administration counts a spouse’s occupancy as compliance in the event of deployment or a Permanent Change of Station. According to the VA, the home must be occupied within 60 days and an adult child cannot fulfill this requirement, even in the event that the veteran parent doesn’t have a spouse.

How Soon Must You Occupy When Using a FHA Loan?

A loan insured by the Federal Housing Administration has more leeway than the previous two. For example, you can rent out the property if you meet the following requirements:

  • The property is a multiple-family unit
  • You live on the property
  • The space you intend to rent isn’t the space you’re living in

Otherwise, you must wait 12 months before renting the property.

Like the other loans mentioned, you must occupy the residence within 60 days. However, if you’re unable to comply, a co-borrower (not co-signer) may fulfill this requirement. The co-borrower need not be related to you.

Whether you’re applying for mortgages or real estate bridge loans, it’s vital to do your research. With a little effort, you can find the right financing to help you get your dream home.