DSCR loan on owner occupied multi

[Robert Gonzalez]

Hello everyone,

I am looking to buy a small multi (probably duplex or triplex) in Chicago that I will eventually owner occupy. I can get it with a DSCR loan now and would not live in it initially, but would want to eventually move into it 6-12 months down the road. My lender says that shouldn't really be an issue, but just wanted to see if this was too good to be true! Some context, I have 3 other properties in a different city and am currently on 1099 income (so I can't do conventional) for the past 3 months. To avoid non-competes and make twice as much, I wouldn't be getting a W2 job initially in Chicago and would rely on 1099 income. Is there any kind of seasoning or issue I should be aware of with moving into this property eventually?

[Nick Belsky]

@Robert Gonzalez

Most any DSCR loan is going to be chalked full of docs where you agree to NOT occupy the property while under the terms of the loan you are signing docs for. So to say, in a year or so you can move in is 100% mortgage occupancy fraud. Now, if you were to refinance to a consumer loan prior to moving, that would be perfectly legit. Keep in mind, many DSCR loans have prepayment periods, so if you enter into a 3 year ppp, then refi out after 12 months, you will have to cover some penalties at exit to the consumer loan.

Cheers!