FHA 203(b) Loans and Vacation Homes
In general, you cannot buy a vacation home with a 203(b) loan. 203b loans are intended only for owner-occupied primary residences, and, in some cases, HUD-approved second residences. HUD approves second residence FHA loans on an individual basis in the case of hardships like divorces, relocations, and growing families, but not for vacation homes. However, if you want to assume an existing FHA loan, such as a 203b loan, on a home, you may be able to use it as an investment property. And, at some point, you may be able to convert that investment property to a vacation home. However, you should check with your lender and the FHA to be sure.