Final answer:
The FHA requires the borrower to occupy the residence as their primary residence within 60 days after closing on the loan to ensure that FHA loans are used for primary residences and not for investment properties.
Step-by-step explanation:
The Federal Housing Administration (FHA) requires a buyer to occupy the residence as their primary residence within a specified period after closing on the loan. Generally, the FHA mandates that the borrower must take possession and occupy the residence as their primary residence within 60 days following the loan closing. This requirement ensures that FHA loans, which offer low down payment options and are insured by the government, are used for primary residences rather than investment properties.
It's important for borrowers to understand these occupancy requirements, as failing to comply could result in violating the terms of the FHA loan agreement. In the context of an FHA loan, possession typically refers to physical occupation of the property by the borrower.