when applying for a mortgage or refinancing the lender will need to know if the borrower is going to be an owner occupant or an absentee owner some types of loans may be available only to owner occupants and not to investors the application will usually state the borrower intends to occupy the property as his her primary residence or some variation thereof when the borrower will be an owner occupant generally for a property to be owner occupied the owner must move into the residence within 60 days of closing and live there for at least one year 2
an owner occupant owns a property and resides at the same property while an absentee owner does not live at the owned property buyers do not qualify as owner occupants if they are purchasing property in the name of a trust as a vacation or second home or as the part time home or for a child or relative homeowners usually are not required to notify their lender if they are moving out of an owner occupied home in which they have lived for at least 12 months the intent when applying for and receiving the loan is significant if a buyer tells the lender that they plan to live in a home while knowing that they intend to rent it that is considered occupancy fraud special considerationslenders may offer special programs to buyers who intend to live in a property rather than renovate and sell or lease it for proof such a buyer must sign an owner occupant certification document the owner occupant certification form also known as hud 9548d can be found on the u s department of housing and urban development hud website it must be signed by the property s buyer and real estate agent and filed with the sale contract any submission of a false owner occupant certification on property risks hefty fines of up to 250 000 or imprisonment of up to two years 3there is some flexibility in lending guidelines for borrowers who intend to live in the home but need to move out within 12 months of the loan start date loan documents may specify minimum residency for some programs for example hud offers a 50 discount on hud owned homes to firefighters law enforcement teachers and emergency responders the good neighbor next door program encourages these professionals to move into revitalization areas the hud discount is connected to a three year owner occupancy requirement borrowers who leave before the period ends would owe hud a prorated portion of the discount that they received 1pros and cons of owner occupied investment propertytax savingsaccess to u s department of housing and urban development hud buying assistance programsaccess to hud foreclosurescloser contact with tenantspotentially more expensive insurancepotentially roommates with your tenantsliving in the home that you invest and rent out can help you generate wealth quickly unfortunately it also comes with the reality of either living with your tenants or at the very least having very close contact with your tenants for example if you re in a duplex make sure that you consider your own personality and willingness to live with other people before you make the leap 