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Background:

I purchased my home in Maryland on October 2015 with a USDA mortgage loan. I would now like to rent my home out and move because I'm getting a new job somewhere else in Maryland. I read online in various places that you have to live in your home for three years before you can legally rent it out if your loan is USDA provided. I called my mortgage company today though and the customer service representative told me that I am allowed to rent my house out and that there are no rules regarding renting; So long as I change my insurance and continue to pay the mortgage they could care less.

Questions:

  1. Am I legally safe to proceed with renting out my house?
  2. Should I get anything in writing before doing this?
  3. Can I trust the word of a customer service representative from my mortgage company?
  4. Should I contact the USDA themselves and ask them?
  5. Am I at risk for committing mortgage fraud?

References:

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The program is between the government and the lender, with respect to you: the government doesn't impose any conditions in you, it puts conditions on the lender, so that the government will guarantee the loan. (Here are the regulations). The lender has to make sure that you intend to do various things, and meet certain conditions. If you lie about satisfying requirements or about the intent to live there, that would be fraud. There is no rule requiring you to sell the house, or turn down the job, or commute an unreasonable distance, or let the house sit unoccupied while you pay off two mortgages.

It would absolutely be wise to verify the company's interpretation of the law with USDA. The law requires you to sign a form declaring an intent to live in the house for a period, but an intent and an absolute commitment are not the same thing.

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