Posted by Jen on January 13, 2004 at 09:39:50:
Ummm, no, I’m not looking for a loophole. I really want to live in this house that I’m thinking of buying for rental property, because it’s in a better school district than my home. I know I won’t live there long though, because it’s a bit small. Now do you have an answer to my question, or not?
owner occupied vs rental property - Posted by Jen
Posted by Jen on January 12, 2004 at 20:48:54:
Ok, I know it’s fraud to try to obtain an OO loan on a property that I plan to rent out. BUT, what if I do occupy the property for a short time, say 6 months, and THEN rent it out? I have found a few old posts that address the OO vs NOO issue, but not a specific answer for this question.
Is there a specific period of time that the property must be OO in order to qualify for an OO loan? If I get 100% financing on an OO property, then do I need to refinance under NOO when I move out? Does it matter?
Re: owner occupied vs rental property - Posted by wes
Posted by wes on January 13, 2004 at 12:28:42:
As Ed said, 6 months to a year would be good and there is no problem with using this property as a stepping stone(it makes it easier if your next house is more expensive than the last). Lenders can see the progression of moving up to a more expensive home. I have had them balk at moving down in value. Not decline loan just hassle you with more documentation and explanation.
Due to amount of loan fraud going on, more and more lenders are stating they will check-out O/O status after closing (usually in first 90 days). Main way is by checking name utilities are in.
My Bank of America rep. says they have no magic number of months you must live there but again as Ed said, 6 months would be the mininum I would plan.
Re: owner occupied vs rental property - Posted by Ed Garcia
Posted by Ed Garcia on January 13, 2004 at 10:10:02:
Jen,
I?d live there for a minimum of 6 months preferably a year and I?d document my living there by showing the address on my tax return, have the telephone bill as well as utilities in my name. If you do that, you shouldn?t have any problems.
In all fairness to you, this house can be bought as your home and a stepping-stone to future investing.
Ed Garcia
Re: owner occupied vs rental property - Posted by livingsd
Posted by livingsd on January 12, 2004 at 21:20:42:
If your serious about your investing, do it right. Your looking for a loophole. You may find one, but it will catch up to you.
Re: owner occupied vs rental property - Posted by Jen
Posted by Jen on January 13, 2004 at 10:36:22:
Thanks Ed! That’s what I was looking for. And that’s what my plans are for this house…a temporary home, and a stepping stone.
Jen