I was pre-approved for a conventional mortgage on a small home as my primary residence. I'm at the beginning of the process and am curious how long after purchase I have to use this house as my primary residence before I can convert it to a rental property. I understand it is considered fraud to use it for a purpose other than stated and have no interest in doing that. However, is it a red flag to the lender if I ask them this question? Is it one year for most mortgages, or does it vary?
I was pre-approved for a conventional mortgage on a small home as my primary residence. I'm at the beginning of the process and am curious how long after purchase I have to use this house as my primary residence before I can convert it to a rental property. I understand it is considered fraud to use it for a purpose other than stated and have no interest in doing that. However, is it a red flag to the lender if I ask them this question? Is it one year for most mortgages, or does it vary?
I have purchased homes in the past the moved into, then later moved to another ones. Back in the 90's, it was two years. Had discussions on this site and was advised currently it's one year.
I was pre-approved for a conventional mortgage on a small home as my primary residence. I'm at the beginning of the process and am curious how long after purchase I have to use this house as my primary residence before I can convert it to a rental property. I understand it is considered fraud to use it for a purpose other than stated and have no interest in doing that. However, is it a red flag to the lender if I ask them this question? Is it one year for most mortgages, or does it vary?
I have purchased homes in the past the moved into, then later moved to another ones. Back in the 90's, it was two years. Had discussions on this site and was advised currently it's one year.
Review your mortgage documents. I agree with @Frank Chin it’s generally one year. If you are under a special loan program it may have other stipulations. You’ll need to review it carefully.
Real Estate Coach · Salt Lake City, UT · Member since 2017 · 272 posts · 414 votes
6y
We had one that we rented out almost immediately. One of the keys is you have to have the intent to use it as your primary residence. In our case, we had the intent, purchased the home, moved in, and a few months later, I got transferred (active military). We had renters in there right after we moved out. Come to think of it, that's happened to us twice with primary residences/rentals. Of course, there are legal protections for military that you may not have, but the concept is the same. You have to have the intent of using it as your primary residence...
General rule of thumb is one year. As long as you keep paying your mortgage, your current lender probably won't take any action on you if you turn it into a rental earlier. Where it can bite you is if you try to get an additional primary residence loan a few months after you bought the investment property. That will raise red flags about your intent and potentially disqualify you for the loan. At a minimum, you'd be asked to explain why and potentially show documentation of some sort to corroborate your story.
Rental Property Investor · Navarre, FL · Member since 2019 · 913 posts · 640 votes
6y
On my mortgage docs it says 1 year. That said, we moved out of one about 3 months after moving in, rented it immediately. Never heard from the bank, and didn't have any problem getting another loan right away for owner occupied, albeit with a different lender.
If you keep paying, they're probably not going to hunt you down. But they could.