*Note: this isn't my scenario, but that of a family member who was curious to know if anyone has insight into this situation.*
He bought a foreclosed house through HUD in the summer of 2013, with the stipulation that he live in the house for at least one year before selling -- this is because the government is discouraging house flipping in favor of encouraging primary residence ownership.
He wants to keep the house. However, he got laid off in December, and is having trouble making the mortgage. He is collecting unemployment, working part-time in food service, and is getting a roommate. These moves still leave him about $500 short each month from being able to pay all of his living expenses.
Unless he gets a job paying at least 30K soon, he will be foreclosed on because he can't make his mortgage OR he will have to sell the house and move into something more affordable ... but he's not clear that he can due to the HUD owner occupancy requirement, and he has yet to get a clear, definitive answer from anyone as to whether he can legally sell the house before 12 months have passed. He has spoken to real estate agents, HUD, and a lender but the answers are somewhat vague.
For example, HUD sent a generic email that basically restated the original requirements and warned about huge fines or imprisonment if the house is sold too soon -- but no comments on what someone in true financial hardship can do.
Does anyone know definitively whether or not he can sell the house now without risking legal problems?
Is there an allowance for genuine financial hardship or are the owner occupancy rules completely inflexible?