HUD (like Fannie, Freddie, WF, etc.) favors o/o buyers over investors due to HUD policy (Cranston-Gonzalez National Affordable Housing Act of 1990 for starters). The argument is that more o/o buyers will stabilize communities, even though the reality is that they typically pay lower prices in o/o periods than investors with offers on the sidelines as many foreclosure agents have witnessed all too often, leading to other lower appraisals for other listings in the area and depressed values in some extreme cases. But with this policy for those select houses, first-time buyers & move-up buyers actually have a rare "fighting chance" against cash investors.
Many investors bid higher than o/os for single family & multi-family properties. This is especially true in the Twin Cities since our rental & resale markets are so strong right now due to low inventory (as evidenced by the HUD multi-family properties, in particular, that do not sell during the o/o period then sell to cash buyers for $5k to $10k+ over the list price the first day bidding is opened to investors).
Regardless, HUD gives priority to o/o bidders and falsifying information on any form of the Department of Housing and Urban Development is a felony. But if you purchased in the extended period you are free to rent or sell the house at ANY time so hopefully that is the case!
One investor buyer sold an extended period HUD he bought to a cash buyer exactly 22 days after buying it! HUD does NOT have a minimum time restriction to resell like Fannie, Freddie or BOA for 60-90 days, for example, so that is a benefit if a house goes into the extended period if you want to renovate and resell quickly. Hope this helps!
Elizabeth has a great answer. From your response to that answer it looks like your circumstance may dictate a change in your plans, so contacting HUD may "let you off the hook" for the OO requirement.
Also, I'm a stickler for details, and HUD's 9548D states that you will occupy the property as your primary residence for at least 12 months. I can't be the only person who reads that and realises it doesn't say it has to be the first 12 months. Really, that is more of an observation than advice.
Pick up the phone, call HUD let them know you wish to honor your commitment, but you need to do what's best for your family. There are rules, but there are exceptions.
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Financing Kentucky One Home at a Time
We purchased the house in March 2013, and the house, well you could not live in it. We gutted the house and started in with the repairs and in Jan of this year we could see the light at the end of the tunnel. We were 99% done all we had to do was put the applaince in. When he moved in without us knowing, when we asked him about the getting loan he said that he had to live there for a year , if we forced a sale of the house we would be fined 250,000 and spend 5 years in prision.
Keep in mind that we have put every penny into the house, my step-son has not done anything. We pay the insurance and the property taxes, plus the cost of the house and all repairs plus brand new applainces. We just want our money back out of the house.
Are we looking at jail time and a fine??
Does it mean you have to have title in your name and not LLC? Do utility bills qualify? Alternatively, can the property be in the name of LLC but you still get some utilities bills in your name?
I understand that owner occupying a property gives you the tax inventive for a Homestead discount on your real estate taxes. Just you have to occupying the property on Jan. 1st of the new year.
Seems that what qualifies as proof of owner occupation is purposefully left vague, especially if financing is not sought.
For title or financing there is really no obstacle to selling your home less than 12 month's. I just had a client do this and we had zero problems. You just can't buy another HUD property classified as owner occupant for 2 years from the date you bought the original house.
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