If I get a loan for a single family home and I get it as a primary residence loan, how long do I have to actually have to live there? Could I rent it out after a certain amount of time?

Thanks
Mark

Also, how is this status verified? How will they know if I am living in the house or renting it out?

Thanks

masmao, People do move out of thier primary residence and use it as a rental property all of the time. However the lenders loan was based on the fact that this is your primary residence, and the underwritting is based on that fact.

An issue that has happened alot over the years is loan officers and buyers have worked deals that were obviously NOO as owner occupied. Purposley doing this is mortgage fraud and the lender/buyer could probably be prosecuted for this. I have heard "stories" of buyers that were using owner occupied loans as rental properties and the lender can call the loan due.

Occasional lenders will randomly audit thier loans and they will find out. I dont know the legal facts, but I wouldn't suggest doing it.

The level of risk for default on owner ocupied property is much lower than investment or bare land. When borrowers run into financial issues the one thing that they always find a way to pay for is thier home. They will walk away from rental properties and bare land if it means making it another month.

If you buy a home as a primary residence, you will get better loan terms because it is owner-occupied. Interest rates on an owner occupied properties are much lower than those non-owner occupied properties (investments).
To benefit from tax exemptions, you must reside in your residence for 2 consecutive years.

If you decide to buy the property as your primary residence and turn around and rent it shortly after, I'm going to assume that you do not own any other properties under your name at this time and that you are a first-time buyer...yes?

Let's say you move out and rent it out? Are you going back to renting yourself? Live at home rent free? Are you looking for rental income at this point? What's your story?

Now let's assume that one year goes by and you want to buy another property, you find the property and you apply for a loan.
An underwriter will verify your residence history, the mortgage on the first property will appear on your credit report. They will verify that your current residence mailing address match the the address of your first property. If it doesn't, they will wanna know why and investigate your current living situation and demand satisfactory answers.

So now you have that first property as your primary residence and want to buy another one. You can't have 2 primary residences. Is the new subject property a second home then?
The underwriter is going to look at your loan application, what does it say? Primary or second home or investment property?
Then he is going to pay close attention to the value and condition of the home, the distance of the property from your place of work, your income...has your income increased? are you moving up in value? If not red flag!

If there are any red flags of potential mortgage fraud, that file is going to get dissected from top to bottom, PERIOD.

Noone prohibits you from buying a property and renting it out. Mortgage fraud happens when people try to bypass the system and pass a property as owner occupied to get a lower rate when in fact it is a non-owner occupied.

Lenders will find out everything they need to know about you before they lend you the money. They won't care if you live in it for a while then rent it out as long as they get their money each month.
You may encounter some problems if you intend on buying several other properties though.

So again what's your story?