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Momt, Home Buyer in Arizona

How long does a person have to commit to owner occupancy?

Asked by Momt, Arizona Sun Jun 17, 2012

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Ran into this question a couple weeks back with a buyer who wanted to make an offer on a HUD home before it was available to investors. According to HUD the answer is one year, but I will echo the sentiments of the other answers here that it depends on who is asking for the owner occupancy.

Cameron Piper
Coldwell Banker Burnet
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0 votes Thank Flag Link Mon Jun 18, 2012
It depends on why you are asking. If it is a condition of a contract, the contract will specify. If it is a condition of financing, the program will specify, etc. You will need to check with the specific guidelines with regard to the specific owner occupancy stipulation. As a general speculation, it will be as little as one to two years, or as long as 6+ years, depending, to avoid penalty and/or interest. Check with your agent, contract, banker, accountant or attorney as needed.
0 votes Thank Flag Link Sun Jun 17, 2012
One thing that non-Realtors don't often realize is that every sale, every offer, ever negotiation – is different. General questions like yours can be answered, generally, with 'Well, it depends."

If you have a property in mind, we can find out the details. Otherwise, answers vary.

Stephanie Fox
0 votes Thank Flag Link Sun Jun 17, 2012
The commitment depends on the loan. There are programs with a one year commitment, some with 3+ years, some wih five years. Your Realtor or Mortgage Expert should have the answers for you.
0 votes Thank Flag Link Sun Jun 17, 2012
The answer depends on what kind of requirements for the loan, which can differ. It can be as little as one year. Here's an example of some wording for FHA:

"I will occupy, establish and use the property as my primary residence within 60 days after the closing and continue to occupy the property as my primary residence for at least one year...In the even that I do not occupy the property...I shall pay $10,000 to the seller as liquidated addition to the seller's right to retain any earnest money deposit...I agree to pay seller's attorney fees and cost...."

I've seen requirements to live in the property for 3/5 years and for 5 years.

If you have any questions about any particular home, you can contact me at or 612-728-2204.
0 votes Thank Flag Link Sun Jun 17, 2012
Each bank is different so make sure you check with the contract with your Realtor. Most look for one year and some have penalties up to $10,000 so you really want to know what you are signing. They typically give you 60 days to occupy so you have some time to clean and fix the home to your needs. HUD, Freddie Mac and Fannie Mae all have unique programs too, so look into what might work well for your situation. HUD has the $100 down paymnt deal that has worked for a few of my clients.
0 votes Thank Flag Link Sun Jun 17, 2012
It's all about the intent to owner occupy.

Just remember that mortgage fraud penalties are $1,000,000 fine and/or 30 year in the slammer.
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0 votes Thank Flag Link Sun Jun 17, 2012
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