Investor · Yuma, AZ · Member since 2017 · 24 posts · 9 votes
I recently closed on a duplex with the intention of moving into the vacant unit (I inherited a nice-but-always-late tenant, which I'll ask about in another post). Since I am moving in, I was able to get a conventional loan. While waiting for repairs to be completed, I came across a great deal on a SFR in preforeclosure, and my offer was accepted.
So my question is, can I move into this new purchase instead of my duplex? I know I'm supposed to wait one year before putting the vacant unit up for rent, based on the terms of the loan, but what if I want to move now? Would I incur a penalty? Would i be sued for breach of contract? Am I breaking some law?
Now assuming I do chose to do this, can I qualify for a conventional loan instead of an investment loan, especially being that I've so recently closed (less than a month ago) on a conventional?
I apologize if that's a little convoluted, but it's my first of many questions!
Rental Property Investor · Greenwich, CT · Member since 2015 · 4k+ posts · 2k+ votes
6y
For the purposes of my answer, I'm assuming that this isn't a government-backed mortgage, @Ben Rodriguez. Primary-residence mortgages usually have some kind of clause at to intent and having to move into the property within such a time frame (60 days?). There are often exceptions for a change in circumstances (you get a new job 500 miles away). That isn't really what's happening here. You just changed your mind. I'm no lawyer, but it sounds like you may be brushing up against something that smells like mortgage fraud. That's a very bad thing.
Bottom line, read through all of your mortgage documentation (sure to be a scintillating read!). If you're still unclear, call your closing attorney.
Why not just use an investment loan on the SFH and rent it out for a year?
Investor · Yuma, AZ · Member since 2017 · 24 posts · 9 votes
6y
Thank you. I definitely don't want to mess with anything that may be fraudulent! The intent in purchasing the SFR was to rent it out, however it would've been slightly more convenient to live in it and rent the duplex. By "convenient" I mean a few minutes closer to work, stores and family/friends. Nothing that's worth the possible trouble. I will likely follow your suggestion and move into it a year later if the tenants move.