Tara S., Home Buyer in Shelby Township, MI

Can I get out of a owner occupant certification after buying a fannie mae property?

Asked by Tara S., Shelby Township, MI Mon Sep 26, 2011

About a month ago I purchased a forclosed Fannie Mae owned condo. My boyfriend and I planned to live there and occupy it as our primary residence. After living there for approximately one month, we learned that we hate the area and want to sell it. We realized that we should have investigated this prior to purchasing the property. Unfortunately after reviewing my papers I signed the owner occupant certification saying I would live there for a period of at least one year. Is there any way I can get out of this?? I was thinking if we couldnt put it back on the market I could land contract it out or rent it..?

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Hi Tara:

If you have a mortgage on the home you cannot land contract it due to the due on sale clause in most mortgages. Signing the owner occupant certificate states that you will live there for a year after purchase. This is done so that owners can get into homes before the investors can purchase them. You are obligated to own the home for at least a year. If Fannie Mae finds out the home was transferred within the year you can be subject to a $10,000.00 fine and be unable to purchase another Fannie Mae property. If it were me I would make the best of it and stay in the condo for the year to avoid any problems.

Good Luck,

Karen Paytas, GRI, CMS
Realtor
Real Living Kee Realty
586-709-8465
kpaytas@mirealsource.com
2 votes Thank Flag Link Mon Sep 26, 2011
Great question. I'm in the same boat. Not necessarily because of the neighbors, but because of the overwhelming amount and complexity updates and repairs needed....combined with my diminishing zest for doing those type of things and my limited time in doing them. I'd like to sell it now and get a simpler condo or townhouse but after reading the comments, I'm going to give it a few more months and put it up 90-120 days before my one year anniversary.
0 votes Thank Flag Link Thu Jan 26, 2012
Check to see if there are any deed restrictions. Sometimes banks will put a mandate that if you sell the property, it can not be sold for more then 110% (for example) of the price you paid for it. I would imagine that as long as you sell it and adhere to any deed restrictions they may have included, you would be okay ... BUT...

I recommend that you seek legal advice, as I can not and do not provide legal advice and/or counsel. That can only come from a licensed attorney.
Web Reference: http://DoorToDreams.com
0 votes Thank Flag Link Tue Sep 27, 2011
Tara,

The only thing that changes is that you can sell on a land contract. By doing so you will be moving out & still in violation of your occupancy agreement. You could try asking a good real estate attorney but I don't know of anyway around it unless you had some medical reason or hardship.

Best Wishes,

Sigrid Garrick
0 votes Thank Flag Link Mon Sep 26, 2011
@ Sigrid & Bob.. I don't have a mortgage.. Does this change the circumstances at all?
0 votes Thank Flag Link Mon Sep 26, 2011
Tara,

Unfortunately, if you sell it in any form or rent it, you will be in violation fo your contract & you could get fined. Land Contract is still a sale but you would retain the deed till it was paid off. Since you hae a mortgage on the condo, you really can't do a land contract.I would suggest that you live with it for just as long as you have to. Your contract states that you must live there.You can put it on the market to sell about 9 months after your purchase but making sure that you don't close on the sale until the year is up.
I just thought of something. Did both of you sign the occupancy contract? Whoever didn't sign the contract is free to leave. In the meantime, you could do your research & see what area you would like to live in. You may need to pay more in a different area, so start saving. If you don't have a budget, you may want to start one. I think Macomb is offering some free financial classes. You might want to check it out.

Hope this helps you,
Sigrid Garrick
0 votes Thank Flag Link Mon Sep 26, 2011
FYI I don't have a mortgage.. I purchased this home with cash... does this have any impact on the ability to seel it before 1 year?
0 votes Thank Flag Link Mon Sep 26, 2011
hi tara....you cannot sell on land contract because of the due-on-sale clause in your mortgage....it creates a transfer of interest..
the owner occupant affidavit you signed was mainly to document the file that you were not buying it as an investment.....
you can sell it....
best regards..
bob mclcure
percentPlus
0 votes Thank Flag Link Mon Sep 26, 2011
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