Real Estate Agent · Denver, CO · Member since 2017 · 91 posts · 20 votes
I’ve been talking to a few lenders about how many months I have to actually stay at my house, before I can rent it out. And get another owner occupied mortgage for another new house. But I’ve been receiving different answers: 12 months, 6 months, 0 month, etc. Please help me with this simple question. Thank you!
Investor · Ogden, UT · Member since 2018 · 295 posts · 208 votes
6y
For most agency owner occupied loans like FHA and VA loans you have to PLAN to stay in the house for 365 days. After that you are free to get another owner occupied loan. The plan portion is a loose term though. Things can change - life circumstances, baby, new job, etc. that can make an exception to the rule. At closing on these loans you sign a document (one of the many) that states that you plan on making the home your primary residence for a year. If you get this kind of loan with the intention of renting the house out and immediately do you are technically committing mortgage fraud. But if you move into the house and make it your primary residence and then, say, 8 months later you get a new job in a different town you are allowed to rent the home. I would just caution you to be careful and have the discussion with your lender if you find yourself wanting to rent your home before the year mark. I say that just so you have all the information! My wife and I plan on purchasing another house hack this summer once we reach our year point.
Specialist · PA · Member since 2016 · 143 posts · 71 votes
6y
There is no set rule for this. I'm assuming you have not purchased the house yet?
Most lender want to you move into your Primary residence with 30 to 60 days. I never saw any mortgage agreement that stipulate that you must live for 0, 6 or 12 month.
Ypsilanti, MI · Member since 2018 · 189 posts · 127 votes
6y
What's your long term plan, have you taken capital gains in mind? Live in the property less than 12 months your capital gains tax will be 10%-37% depending on your tax bracket, 12-24 months 0%-20%, 2 years nil. Would keep that in mind if you're thinking of selling anything any time soon.
Investor · Ogden, UT · Member since 2018 · 295 posts · 208 votes
6y
For most agency owner occupied loans like FHA and VA loans you have to PLAN to stay in the house for 365 days. After that you are free to get another owner occupied loan. The plan portion is a loose term though. Things can change - life circumstances, baby, new job, etc. that can make an exception to the rule. At closing on these loans you sign a document (one of the many) that states that you plan on making the home your primary residence for a year. If you get this kind of loan with the intention of renting the house out and immediately do you are technically committing mortgage fraud. But if you move into the house and make it your primary residence and then, say, 8 months later you get a new job in a different town you are allowed to rent the home. I would just caution you to be careful and have the discussion with your lender if you find yourself wanting to rent your home before the year mark. I say that just so you have all the information! My wife and I plan on purchasing another house hack this summer once we reach our year point.
The following applies to any Conventional, FHA, VA, or USDA loan, where you are buying as a primary residence.
At closing, you will sign a Mortgage, which you are attesting that you intend to occupy the property within 60 days of closing, and for at least 1 year.
Any intention otherwise is mortgage fraud.
If circumstances change AFTER you close, then you may have options, but ultimately this is up to your loan servicer. They have the right to call your loan due immediately if they find out that you aren't occupying, and furthermore you could face other punishments such as fines or jail.
Real Estate Agent · Denver, CO · Member since 2017 · 91 posts · 20 votes
6y
@Steve K. Hi Steve, I bought the house last Dec. The lender said I had to stay at my house 12 months, before I can buy another one as another owner occupied house. The first one will become a rental.
Real Estate Agent · Erie, CO · Member since 2014 · 1k+ posts · 512 votes
6y
@Vee Vu it's 365 days as some others have stated. If you're trying to hack effectively you can purchase your next house about 10 months after the first purchase. This can allow you to fulfill the 365 day occupancy timeframe and still move into the new place within 60 days.
Rental Property Investor · Gulf Shores, AL · Member since 2019 · 107 posts · 115 votes
6y
@Dan Mackin
You can actually rent out an owner occupied property at any time BUT that can’t be your intention on the date of closing.
If you get transferred for work, go through a divorce, etc after closing, your situation has changed and deciding to rent out after the fact is not considered mortgage fraud.
Real Estate Agent · Erie, CO · Member since 2014 · 1k+ posts · 512 votes
6y
@Reginald Ross that's a good point to add. People do similar things with their 1031 exchanges to get into a primary home with the tax benefits from the rollover. With this I just wanted to cover the basic scenario for a majority of people who hack a property.