Do you have to live in the home if you use a 203k loan?

8 Replies

I'm looking into using a 203k loan for my first investment property, but i do not wish to live in the home. I've read that you "have to plan to live in" the house you use the loan on, but do you actually have to? 

The home has to be your primary residence for at least a year from purchase. With that said, you do not need to move in until the rehab is complete and the unit is habitable obviously. 

Knowing you aren't planning to live in it when you get the loan is called bank fraud. 

PS I see it is your first post. Welcome to BP

Originally posted by @Austin Dines :

I'm looking into using a 203k loan for my first investment property, but i do not wish to live in the home. I've read that you "have to plan to live in" the house you use the loan on, but do you actually have to? 

Occupancy fraud is a big deal

https://www.fbi.gov/video-repo...

 

Okay thank you. I wasn’t planning on scamming the bank or anything lol, I just wondered if I had to actually live there or not. I’m just trying to find a way to buy a house I found as a potentially good flip house without living there and low money down. 

@Austin Dines there are lots of ways to buy properties with little money down.

There is a lot written about it here on the site. However it is spread all over the site. you can save some looking by buying @Brandon Turner 's book on buying properties with little or no money down. Look under the bookstore tab above or on Amazon.

Keep in mind a lot of these techniques sound great in practice but can be difficult to pull off. 

Hey, welcome to BP!

The short answer is yes.

The long answer is..

1. Renovations might take a while, depending on the condition of the property. You can't live there until you get a certificate of occupancy or at least have it inhabitable. 

2. "Primary residence" has different meanings.. in some cases, this means only 6 months out of the year.

3. We are owner occupants of a 203k and can't say anyone checked on us once.

4. Fraud is bad.  Orange fed jumpsuits and prison sound awful.

If I were you, if it's a reallllllly good deal, I'd find a way to live in it within the rules.  Our 203k has been a grand slam for us financially.