3% Down Conventional Loan

2 Replies

My wife and I are considering taking advantage of a 3% down first time home buyer offer for a conventional loan to purchase a multi family. However, my understand is you are required to live in it within so many days of taking possession of the property.

Does anyone know what the penalty is if you're not living there? Does the mortgage company generally investigate this if the mortgage is being paid on time?

@Jeff Dixon I am not certain that the mortgage company will investigate but if there are leases in place at the time of purchase then they won't loan on it. One of the unit leases has to be ending within 30 days of closing I think and notice must be given before you close and you must occupy within 60 days.  Additionally, you have to sign a document stating you will be moving in and if you do so with no intention of moving in then you have committed fraud. I am not an attorney but that is bad and I would think the penalty might include jail time. 

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