My wife and I bought a townhouse two months ago using a 5% down conventional loan. We had the intention of living there for a year, turning it into a rental and then going to buy another property in the area to rinse and repeat. However in that time, I've seen and have had others tell me they've seen drug dealing happing a few doors down, and we found out my wife is pregnant with our first child - yay! It appeared to be a nice townhouse community when we would come by to look at the property before, but after actually living here it's not that great and bringing a baby home to it makes me nervous.
If we were to move out early, I would still want to rent the townhouse out and go buy another house using a VA loan, but am afraid this constitutes as mortgage fraud before the 12 month mark. Is it better to just ride out the remaining 10 months, or does having a baby and wanting a bigger living space preclude me from following the one year owner occupied agreement?
Sounds like you are over near Severn Md .
Ok if there is dealing going on , the person you rent it to is going to react the same way you are . They will rent the place and then want to move
@Rob Roy call the cops. Get rid of the problem through legal channels. I would expect the problem to go away pretty quick if police started showing up asking questions. No one who is a drug dealer is going to want to stay where the cops keep looking into that activity.
You may want to talk to your bank first and explain the situation regarding a baby on the away. It may work but in my opinion is not a valid excuse to break the contract over a couple of months.
If they do not agree simply ride it out and move after the baby is born, no big deal. A few months is not going to change your life.
As for the assumed drug dealing, that takes place in every community in the nation. I would be more concerned with the actual crime rate in the community than the perceived crime rate.
See what your bank says first.
Conventional loans usually don't come with an occupancy requirement (though I'd look back and review exactly what you signed at closing...if there is an occupancy requirement, chances are it focuses on your intent). You have to "intend" to live in it as your primary residence in order to meet the lower down payment requirement.
But at this point, in all likelihood, no one will every question it so long as you pay your mortgage.
Clearly you had sufficient "intent" (you moved into the property, after all). But you had a legitimate change in circumstances (new baby) that necessitated the early move.
While I agree that there are other ways to address this (i.e. work with your HOA, neighbors, and/or local law enforcement to improve the community - which will benefit you either as an owner occupant or a landlord), I can't imagine your lender making much of a fuss about this. After all, it's going to take a few moremonths for all of this shake out anyway.
Free eBook from BiggerPockets!
Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!
- Actionable advice for getting started,
- Discover the 10 Most Lucrative Real Estate Niches,
- Learn how to get started with or without money,
- Explore Real-Life Strategies for Building Wealth,
- And a LOT more.
Sign up below to download the eBook for FREE today!
We hate spam just as much as you
Join the Largest Real Estate Investing Community
Basic membership is free, forever.