Questionable Loan Practices

1 Reply

I know people house hack and buy a house with a conventional mortgage and live in one side and rent out the other, but if I were to buy a duplex with a conventional mortgage, rent out one side, and move my stuff and mailing address there but rarely actually stay there... is that considered illegal?

So current situation... I am temporary living with my parents while my in-laws built a house for retirement. They are not moving in right away...I am taking care of it for them until they move retire so I don’t really have the option to leave.

Can I buy a MFH in need of rehab and sleep/work in this duplex a couple nights a week and rehab it for 12 months then rent it?

It already sounds shady writing it but I would like to know the actual laws.

I have no intention of doing it if it is not legal, which I am probably leaning toward it being either illegal or a gray area but any advice on the matter would be appreciated!

Could be a "good" way to get a low money down without having to find a steeply discounted place to BRRR

Jamie,

You can buy a MFH and live in a unit for a short period of time 4-6 months and than move into something bigger, closer to work or school, move due to marriage or moving in with a partner in a relationship. This is called "Change of Life Circumstance" which allows for a person/borrower to make a life change based on circumstance. So lets say you purchased the MFH rehabbed it lived in it for a few months and later changed your mind on wanting to live in a SFR due to size, privacy, family etc...Your okay under those circumstances.

Keep in mind it's not an FHA loan which requires you to reside for (12) months but even still the "Change in Life Circumstances" rule applies. It's when the lender notices a pattern and your trying to get multiple primary home loans in less than 24 months. Bottom line is if you buy the home and it becomes your primary residence you can choose to buy another home if and when you make that decision. Now one thing off topic to remember just in case is if your trying t use the income for a new purchase on that rental you moved out of you will not be able to use that rental income to qualify if you do not have (1) full year on tax returns. Hopefully that makes sense if not message me....