FHA and Conventional Loans

[Don S]

I have read that when doing certain loans the lender wants you to stay in the property for one year. I am assuming this is to deter investors from these loans as the down payment is usually lower that investment loans. How does the lender know if you are renting it out or using it as your primary residence? What are the penalties if you do this? If this was a 4 unit building would anyone consider not renting out one unit for a year just to get this special financing?

I am new and studying all the ins and outs of the process and was just wondering.