3% Down Conventional Loan

2 Replies

My wife and I are considering taking advantage of a 3% down conventional loan to buy a multi family. However, it’s my understanding that you need to move in with so many days after taking possession of the property.

Does anybody know the penalty if you don't move in on time or ever, as long as the mortgage is being paid on time?

Who would generally check into this to ensure the owner has in fact moved into the property?

To buy a Conventional loan multifamily you'd have to put down about 20-25%. You can purchase on an FHA loan for 3.5% down.

As far as the primary residence requirement goes, it's mortgage fraud (felony) if you say it will be your primary residence and you never move in. If it gets found out, it also makes the lender who gave you the loan look bad. Loan originators are often licensed professionals who work only on commission so anything like that could be detrimental to their career.

I agree with what Elise says.  I bought a triplex last August and had to do 20% down.  The lender I worked with only offered 3/3.5% if it was a single family or duplex.  3-4 units was still conventional but 20% down, and of course 5 unites or more is commercial.

As for moving in, I had that as part of my offer that one of the units needed to be vacant so I could move it. This wasn't an issue for previous owner to make sure this was possible.

Not sure if its standard for all lenders, but I was asked to confirm the mailing address for the mortgage payment.  I believe this was a kind of way to make sure you're living there.  Wouldn't want your mortgage going to your tenant.