How do mortgage companie know a residency is a “Primary”?

14 Replies

Looking to buy a property im Preaprroved for an FHA 3.5% down. But they say I must live in the residence for 1 year. My plan was to do a light rehab of the interior within the first few months of owning it and use it as an AirBNB rental after that.

How do they “confirm” it is my primary residence?

Do they show up at your door to check if you live there?

What is the process for this?

Thanks!

I am not sure how they check but they are on top of it with an FHA loan. Also, by not living in the house for at least a year with an FHA that is mortgage fraud. My best advice is always to obey the law.

I'm not sure how they check it, but your taxes will show the rental income. If you're getting an owner occupied loan, best to live in the property for a year to avoid being pinned with mortgage fraud. 

Ways you’ll be busted and end up in prison...so that you can save 1/2 a percent interest. 

Wrong address on driver license, credit card bills, insurance forms. 

Wrong kind of insurance for a primary

Website listing the place for rent

Tax returns showing rental income

The fact you have a different property homesteaded  

The fact you posted you were going to do it on a real estate website for landlords  

Your official mailing address  

You’re right, screw those lenders for trying to help people own a home they want to live in, I’m sure they didn’t do it for you when you were really buying your primary  at least you’ll save a few hundred until then  it’s not like you’re lying to the federal government, the keeper of all the records   

@Ramiro Rodriguez The plain and simple truth is; they probably won't check up on you after you've moved in. But, is "probably" worth the risk? If by some chance they determine you do not live there, they can call in the loan. Or, much worse, there could be a criminal charge of mortgage fraud against you. And, your posting here today would be Exhibit A for the government. 

Would I be able to live in it while im Rehabbing it as well? and is there usually a time period that i have to keep it before I decide to sell it if i decide to sell it after the rehab?

Originally posted by @Ramiro Rodriguez :

Looking to buy a property im Preaprroved for an FHA 3.5% down. But they say I must live in the residence for 1 year. My plan was to do a light rehab of the interior within the first few months of owning it and use it as an AirBNB rental after that.

How do they “confirm” it is my primary residence?

Do they show up at your door to check if you live there?

What is the process for this?

Thanks!

 Here's something to think about. The 2018 average sentencing for mortgage  fraud was 21 to 27 months in federal prison.  

From my research 99% of the time they don’t check. Because after you start making payments your loan is usually sold to another bank.

Some of the ways they check is the following;

Your voter registration information

Your drivers license address

Your W2 and tax returns.

Address on your credit reports

Utility bills

You can airbnb your primary residence. That is not illegal. It is illegal though to rent it out on a lease before the 1 year mark.

It doesn’t matter if they know or not. You signed the contract and agreed to it. They believe you are an honest and trustworthy person. Don’t break that trust by committing mortgage fraud. 

There are lots of ways, so don't risk getting in trouble.  As others said, they can see your rental income on taxes or if it is deposited into your account every month along with payments for where ever you are living, utility bills, mailing address, etc.

They can and will send someone over there and knock on the door and peek in your windows looking for furniture and signs of life. Then they will charge you an inspection fee and put it on your mortgage statement. They cannot dictate where you lay your head at night but they will insist on copies of your bills to prove that you are not renting it out. 

@Ramiro Rodriguez

I understand what you are trying to do but like everyone here says. It’s illegal as hell to do. My suggestion is to rehab it while you live there then when done Airbnb it by the room or rent out the extra rooms to help pay the mortgage until you have lived there enough to legally move out then have your room rented. Sometimes you can collect more by the room than renting it out to one person.