Understanding Mortgage Fraud

3 Replies

My wife and I bought our first owner occupied home in January 2019.  We were intending to live in it and rent it out using Airbnb in the summer since we live in Alaska and the population here skyrockets.  She got offered a job so we ended up renting out the house by March.  The job opportunity did not work out so we started looking for another home and are in the process of closing the deal.

We have intentions to fix it up and live with her parents until the remodel is done.  We are going to do a lot of work ourselves on top of our full-time jobs.  It may take 6-9 months (but hopefully sooner).  Within a year and a half we may potentially have 2 owner-occupied loans on properties that are being rented out.  I do not want to walk the fence of what may or may not be mortgage fraud.  Should we occupy the property a year after it's remodeled?  I would appreciate any advice or feedback.  Trying to get the right perspective to ease my mind.

Originally posted by @Benjamin Walter McPhail:

My wife and I bought our first owner occupied home in January 2019.  We were intending to live in it and rent it out using Airbnb in the summer since we live in Alaska and the population here skyrockets.  She got offered a job so we ended up renting out the house by March.  The job opportunity did not work out so we started looking for another home and are in the process of closing the deal.

We have intentions to fix it up and live with her parents until the remodel is done.  We are going to do a lot of work ourselves on top of our full-time jobs.  It may take 6-9 months (but hopefully sooner).  Within a year and a half we may potentially have 2 owner-occupied loans on properties that are being rented out.  I do not want to walk the fence of what may or may not be mortgage fraud.  Should we occupy the property a year after it's remodeled?  I would appreciate any advice or feedback.  Trying to get the right perspective to ease my mind.

The owner occupied rule applies for 1 year after you buy the property.  You have to intend to use it as your primary residence for that year 

Not a lawyer, not legal advice.

Intent counts for a lot here, seems to me the first purchase is fine given your circumstances changes unexpectedly. That happens.

But yes, you would need to occupy the second house to be in the right side of things. You got an owner occupied loan, right? And not occupying would blur the intent of the first one as well.

If you are going give to occupy for a year I would extend that to two-then you likely have the ability to exclude any capital gain if you sell within the next few years...

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