I was asked this question today and I didn't have an answer so I wanted to reach out on BP and ask here. What would happen if you buy a home using traditional, FHA, or VA financing but decided not to move in after closing on the property? I know these loan products often require the property to be owner occupied within a certain time period, but what will happen if the owner never moves in and decided to rent it out instead? Are there any penalties involved?
I know when I got my first home with a VA loan, I just had to have "the intent to occupy" the home at closing, but it was just a formality, not an actual regulation.
Mortgage fraud penalties I believe go up to 30 years in prison and a fine up to $1 million.
@Russell Brazil , thanks for the quick reply! I should've provided more context to the question. My coworker recently bought a home and shortly after got PCS orders to Colorado. What will be the outcome of this? I assume since he has official military orders, he should be protected, correct?
@Navid A. Yeah he is fine. Following PCS orders is not mortgage fraud :)
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