diff --git a/cloud/rackspace/rax.py b/cloud/rackspace/rax.py
index dad2e2a4f8d..cb1edbab31c 100644
--- a/cloud/rackspace/rax.py
+++ b/cloud/rackspace/rax.py
@@ -285,8 +285,9 @@ def create(module, names=[], flavor=None, image=None, meta={}, key_name=None,
     if user_data:
         config_drive = True
 
-    if user_data and os.path.isfile(user_data):
+    if user_data and os.path.isfile(os.path.expanduser(user_data)):
         try:
+            user_data = os.path.expanduser('user_data')
             f = open(user_data)
             user_data = f.read()
             f.close()