Getting around HUD owner-occupant rule?

7 Replies

Nope.  Any violation of the owner occupancy requirement is considered fraud and comes with a heavy penalty including jail time.  In fact, most loan packages include an owner occupancy affidavit, as well as a copy of the FBI Fraud Warning that are both required to be signed by the Buyer.

So, not worth the risk.  Sorry.

Just curious....what are you trying to accomplish...making a purchase with less down?

@Von S.

The owner occupant rule is for the Exclusive period. You can get around it by waiting until it enters the Extended period. Once there anyone is able to purchase as long as they disclose they are as investor. 

@Cara Lonsdale I'm willing and able to move into the property, this is an all cash purchase. But was told last minute (half an hour or so ago) that it was for owner occupant only so now my estimated numbers look different, though still good.

@Mike Cumbie So I should wait until the exclusivity ends but could risk losing the property to another buyer?

If this is a HUD home and it is in it's exclusive status, you can only bid as an owner occ. Once the initial bidding period is over, it will go to "Extended", and then it is open for investors to bid. This gives owner occupied Buyers a better chance at winning the property over an investor.

If you are willing to live in the property for the required time period, I would suggest doing that.  Because if this is a good deal, it will most likely be gone before it gets to the Extended period.

Originally posted by @Von S. :

Yep, going through with the bid! There's no mention of a time period for living there but maybe I'll see that later.

 The document that you will sign will be that you intend to occupy for 1 year

Thanks for the info @Greg H. ! That's such a short time period. I rent to live in cheaper/better places and invest outside the city so now, I'll just look at this requirement as a reduction in my own rent expense!