Minimum Occupancy Time For Owner Occupied Status
I am buying a nice 2/1.5 condo, there is a real rental shortage in my area people are on waiting lists. It will rent quickly. I can get a much better interest rate if I owner occupy. How long do I need to occupy to keep the bank off of my back? How do most banks verify if you actually live there? Could I get away with offering the place up for rent saying first 3 months utilities payed for 1 year lease that way electricity and water are in my name. Bank checks and I'm in the green, just my shady mind at work. Thanks for your suggestions.
Owner occupancy requirement is usually one year. If you lie on your loan application to obtain an owner-occupant rate for your investment rental property, you have committed loan fraud.
If the loan is federally insured, your maximum penalty is a $250,000 fine and/or up to two years in a federal penitentiary. A one-eighth point reduction on a $100K loan will only reduce your monthly mortgage payment by $7.62. My cost benefit analysis tells me that the penalty for loan fraud is not worth the reduction in my monthly mortgage payment.
Never done it never will I second Dave.
ED
Hi, I just found this forum. I am new, but here is my opinon(I own a couple of rentals)...
My advice would be to either:
a) move into the unit and actually live there for a reasonable time.
Or b) Get an investor loan and sleep better at night not worrying about being caught.
Pretending to live in a unit that you are actually renting out would not be worth it to me.
[ Edited by DaveT on Date 03/17/2004 ]
I just gpt 3 props in last 6 months and paid 6.5% over 15 because I do not live there.
I the chances of getting caught are 1 in 2000000, I would be the lucky guy...plus I can sleep better at night and I can go back to the same bank and look the VP right in the eye when I do decide to do a live-in fix up deal.
my 2 cents
My case is different than most, I am in the Army and I move when they tell me too. I have already been at my current location for 4 years and I know a move is immanent even though I have not received orders. I simply don't want to move into a place for a couple of months then move and they check and try to screw me that is all.
I think that intent is the key, If you have an intent to owner occupy then your job changes or you move in the army then I would go for it. In fact, knowing that a change was imminent I would do it.
I bought my first property this way as an E-4 20 years ago
Make the system work for you