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Richard
Richard, Lawyer
Category: Real Estate Law
Satisfied Customers: 54008
Experience:  32 years of experience as lawyer in Texas. I'm also a Real Estate developer.
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Got a home in my name out of probate it is on aprivate loan

Customer Question

got a home in my name out of probate it is on aprivate loan can i rent it out or do i have to live in it
Submitted: 2 months ago.
Category: Real Estate Law
Expert:  Richard replied 2 months ago.

Hi! My name is Richard & I will be helping you today! It will take me a few minutes to type a response to your question. Thanks for your patience!

Expert:  Richard replied 2 months ago.

Jack....you can do with it what you want. There is no legal requirement that you use it as your principal residence. You have every legal right to rent the property. You did not sign the loan and any provision representing that it would be used as the borrower's residence made to obtain the loan was only an issue of intent of the borrower and does not relate to you. You do not need to refinance the loan as long as you make the payments on the loan as Federal law prevents the lender from calling the loan due to your inheritance. Specifically:

“12 U.S. Code § 1701j–3 - Preemption of due-on-sale prohibitions

(d) Exemption of specified transfers or dispositions

With respect to a real property loan secured by a lien on residential real property containing less than five dwelling units, including a lien on the stock allocated to a dwelling unit in a cooperative housing corporation, or on a residential manufactured home, a lender may not exercise its option pursuant to a due-on-sale clause upon—

(5) a transfer to a relative resulting from the death of a borrower;

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