Does "owner occupied" HAVE TO mean "owner occupied" - Posted by oj

Posted by Rob FL on June 16, 2000 at 15:56:08:

Actually FHA loans require occupancy within 45 days of closing and for the occupancy to continue for 12 months thereafter.

Does “owner occupied” HAVE TO mean “owner occupied” - Posted by oj

Posted by oj on June 15, 2000 at 16:27:24:

I FINALLY got an accepted offer!!

yah yah!!

I have excellent credit w/ no money. So I decided to make my credit do something in REI. I got an accepted offer for a large 2 family. I am purchasing it as a first time home buyer.

Yet, I know after the closing, I will be looking for 2 tenants/families to move in each unit.

One tenants rent would almost but not quite take care of the mortgage


  • Should I wait a couple months?
  • Would the loan people find out that I am not living there if I decide not to move in?


The seller agreed to a seller’s concession. Yet, I need to get the 3% down payment money PLUS money to carpet & paint both units.

What can I do creatively to take of this?

All comments & suggestions are greatly appreciated!


Re: Does “owner occupied” HAVE TO mean “owner occupied” - Posted by PatrickMD

Posted by PatrickMD on June 19, 2000 at 10:07:30:

OJ, At least you have the conscience to ask if misrepresentation of the truth is wrong. In this business, it is. Period.
In a philosophy class I once took, we were posed this dilema: You’re traveling in a Soviet Bloc country with one of their best scientists. He’s asked for your help in crossing the boarder. His contributions could bring world peace, if only he can get to the West. You know his personal documents are forged. Your’s are genuine. You’re a concerned civilian tourist, not a professional spy.
Now, you’re stopped while trying to leave country on a routine check by armed guards at the border crossing. You’ve been brought up by a loving community who’ve taught you it’s wrong to lie. What do you do when the guard asks if you have anything to declare?

A. Tell the truth - meaning a long trial and conviction for espionage and probable execution for both of you;
B. Smile sweetly, look the guard right in the eye and calmly lie that you are both tourists. You both are also favorite cousins of the guards’ powerful director (whom your contact has confirmed is conviently out of town and can’t be reached), and who would look very unkindly on his loyal party-member relatives’ being detained. Of course you have no symbols of Capitalistic decadence to declare! Now, let you be on your way and you’ll report to your cousin what an outstanding job these guards are doing!
C. Turn the scientist in - a long trial and conviction for espionage and probable execution for your scientist friend; an interogation and embarrassing public expulsion from the country for you, and the treacherous betrayal of a friend you’ll have to live with;
D. Panic and run for it - certain death for you both before you get 100 yards;

After much heated debate, our professor told us there are times in the dealings of mankind when, although it’s against our principles, lying sometimes could be a better course to take than telling the truth. But not in most situations.
Certainly not when dealing in real estate transactions. Especially to those who’s job it is to help you!
If there’s no room legally and ethically to make a profit in your real estate deal, simply move on to another deal. I hope that’s helpful.

Re: Does “owner occupied” HAVE TO mean “owner occupied” - Posted by Rob FL

Posted by Rob FL on June 16, 2000 at 16:00:08:

FHA requires “owner occupants” to move in within 45 days of closing and live there for at least 12 months.

Although I don’t know of anybody who ever got caught, I have read on several real estate sites about different cities where HUD was doing random audits for this. I was doing a little research on this a couple of days ago and HUD states that this is considered a federal felony carrying up to $250,000 in fines and up to 2 years in jail.

Why take the risk?

Would It Kill You to Live There for a Little While? - Posted by PeteH(NYC)

Posted by PeteH(NYC) on June 16, 2000 at 10:19:37:

Are you paying rent where you live now? If so, living in one unit is essentially a break-even proposition. You can probably avoid any appearance of fraud if you occupy the thing for a year (this is a non-lawyer opinion) – and if you’re just beginning your landlord career, this is a good way to become familiar with basic maintenance issues, bookkeeping and tenant relations. Besides, if you borrow money to cover your 3% down and minor fix-up costs, say on a credit card, you’ll need a little time to earn that cash back.

Good luck. (That’s exactly how I started.)

Why do Paul and JLK have different names but same email address ? - Posted by Andrew

Posted by Andrew on June 16, 2000 at 09:21:07:

Just curious.
I would be leary of someone telling you to email them with an “answer” to a question like this.


Re: Does “owner occupied” HAVE TO mean “owner occupied” - Posted by phil fernandez

Posted by phil fernandez on June 15, 2000 at 18:32:18:


Owner occupied, does indeed mean owner occupied. If the bank is giving you a loan based on your representations that you are going to live in the property, I would do just that. At the closing you will be required to sign a document stating that you will occupy the property. If you sign this document and do not occupy the property, that would be called bank fraud.

Now is the bank going to find out? Maybe, maybe not. Certainly HUD checks to see if there is owner occupancy. The penalties could be stiff if you do get caught so why even consider it.

let me go one better… - Posted by Carol

Posted by Carol on June 15, 2000 at 19:05:03:

I would not want to start my REI career on a fraudulent basis.

Now, it doesn’t say how LONG you are going to live there, but there are so many entirely legal and ethical ways to do this biz, I would encourage you to take that as your motto and benchmark.

Folks like Phil who have been successful doing it right will always be there to help you do it ‘right’!

Good luck,