I Recently closed on a condo in Chicago but also moved to out of state to Indiana for college. I want to rent out the condo but I secured financing as primary residence and First Time Home Buyer. I want to rent out the condo but I have not lived in it. What are my options?
Review your loan documents to ascertain exactly what it is you promised to do. That said, people's lives take unexpected turns. In a legal case, intent (absent a confession) can only be inferred from conduct and written and oral representations.
This is a little bit of a grey area. If you intended to live in it, but after closing something came up unforeseen, you should be okay.
The legal answer: the bank could accuse you of mortgage fraud. to do this they must prove you had intent to defraud, which is where the prior statement about your intentions comes to play. Otherwise, you need to live there for a year before renting it out.
The practical answer: Once a bank closes a loan, they forget about it unless you stop paying. In fact, if its a Fannie Mae backed loan, odds are it will be sold in the first few months. This topic is similar to the question about transferring mortgages to an LLC. Yes, the bank could call your loan if they found out, but the last thing they want to do is foreclose on a performing asset. As long as you stay current on your payments you shouldnt have an issue.
Review your loan documents to ascertain exactly what it is you promised to do. That said, people's lives take unexpected turns. In a legal case, intent (absent a confession) can only be inferred from conduct and written and oral representations.
Congrats on the purchase! That's awesome. Our first purchase was a little 1br condo in Denver. Now we have five properties between Denver and Colorado Springs.
Big upfront disclaimer: I'm not a lawyer, and this isn't legal advice. That said, there seem to be two answers to your question: 1. The letter of the law. 2. The practical, on-the-ground reality.
You signed mortgage documents that say you intend to live in the property for a year. If you did not intend to do so and you move out, they can accuse you of mortgage fraud. That "intend" is a very interesting term, though, so if you really did have circumstances change, then you might be okay.
We see this sometimes when people try to buy a house with a primary residence loan too soon after buying a different property with a primary loan. Fannie and Freddie can flag that and say something fishy is going on and we won't give you a new primary loan.
In practice, though, as @Zach Westerfield said, banks aren't normally in the business of questioning loans that are being paid on time.