How many different times can a person claim "OWNER OCCUPIED" on an application? - Posted by Aaron Jackson

Posted by RR Smith on February 11, 2000 at 06:02:35:

Currently I am listening to an audio book about useless rules, regs, and “rights” that the feds and lawyers have generated. The FHAdmin. limit used to be 6 SFH, cause that was what my loan org. was brainwashed into thinking, and THEN my mentor went out and got 7! (Don’t ask me how, probably by using different loan programs…) When there are useless rules and regs and no one complains and you can’t point to any individual and say that they are responsible, that is how you get a tax code that is currently 36,000 pages long.
Who would you be hurting by abusing a fix up loan program? Maybe you would be crowding out a few first time homebuyers? I really, really doubt it, since they usually have special programs for first timers, i.e. bond money, special rates, etc.~~~~~~
If you are bumping up against loan program rehab rules I would strongly suggest you go to the people who make and break the rules all the time, namely the banks and mortgage underwriters and do your own deal with the bank for REOwned by the bank. Don’t worry about the limits of programs till you have 3-4 houses in your portfolio?.

How many different times can a person claim “OWNER OCCUPIED” on an application? - Posted by Aaron Jackson

Posted by Aaron Jackson on February 10, 2000 at 23:41:02:

I would like to be a rehabber. I am not married. I have money and good pretty good credit. I want to buy houses with financing. I come in at 95%. I was told if I am buying as INVESTMENT property…I will only come in at 80%. I want to buy a home live in it while I fix it, sell it, and buy another one, and keep doing this.

My question is, is there a limit to how many times I can do this (buy houses and sell them, and claim OWNER OCCUPIED)?

How long do I have to live in 1 house before I can move and claim another property as OWNER OCCUPIED?

THank you

Re: How many different times can a person claim “OWNER OCCUPIED” on an application? - Posted by Dave T

Posted by Dave T on February 11, 2000 at 02:16:11:

As long as you physically occupy the property after you buy it, the number of times you can do this is limited only by how quickly you can rehab, sell, and payoff your mortgage loan.

Although, if you make enough profit on the first one, I suspect that you will have the cash needed to make the 20% down payment for a non-owner occupied loan. Now, you don’t have to move each time you sell your newly rehabbed home.

Have you considered the tax implications of your strategy? If you keep each house only for the short time it takes to rehab and sell it, your profit will be taxed as ordinary income at your current marginal tax rate.

If, however, you owner-occupy your home for two years you can take advantage of the capital gains exclusion on your profit. You can buy and occupy a fixer-upper home every two years, rehab it, sell it, and keep the profits tax free.

Re: How many different times can a person claim “OWNER OCCUPIED” on an application? - Posted by Lee

Posted by Lee on February 11, 2000 at 05:13:32:

What about if you fix it up and then rent it out? How many times can you get an OO loan, fix it, rent it out out and get another OO laon on another piece of property?

Re: How many different times can a person claim “OWNER OCCUPIED” on an application? - Posted by Rob FL

Posted by Rob FL on February 11, 2000 at 10:23:19:

Just a note that most owner occupied loans require a person to live there a minimum amount of time. FHA is 12 months. They are pretty tough on this. HUD has been doing some major crackdowns on this lately. HUD calls it loan fraud. Homeowners are less risky than investors in their eyes.

Some people never get caught. More power to them. But the people that do get caught end up getting nailed with serious federal criminal charges.