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What Are Primary Homes
Primary owner-occupant homes, also known simply as owner-occupied homes or primary residences, refer to residential properties that are primarily occupied by the owner of the property as their primary place of residence. These are homes where the owner lives and resides, as opposed to properties that are primarily used for rental or investment purposes.
Key characteristics of primary owner-occupant homes include:
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Residence of the Owner: The owner of the property lives in the home as their primary place of residence. It’s where they reside on a day-to-day basis.
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Personal Use: The property is used for personal and family purposes rather than being rented out to generate rental income.
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Potential Tax Benefits: In many countries, primary owner-occupant homes may qualify for certain tax benefits or exemptions, such as property tax reductions or capital gains tax exclusions when selling the property.
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Mortgage Considerations: When financing the purchase of a primary residence with a mortgage, there may be different lending terms, interest rates, and down payment requirements compared to investment properties.
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Homeowner’s Insurance: Homeowner’s insurance policies are typically used to protect primary owner-occupant homes and their contents.
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Homestead Exemption: Some jurisdictions offer homestead exemptions, which can provide property tax relief or protection from creditors for primary residences.
It’s important to distinguish primary owner-occupant homes from investment properties, vacation homes, or rental properties. These other types of properties are typically acquired with the primary goal of generating rental income or capital appreciation, whereas primary owner-occupant homes are meant for the owner’s personal use and enjoyment.
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5 Replies
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Primary owner-occupant homes offer lower interest rates and lower down payment
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Primary owner-occupant homes require between zero to 5% down payment whereas second homes require a 10% down payment and investment homes generally require 15% to 20% down payment. Mortgage rates on investment properties or second homes are much higher than primary home loans. Therefore, many borrowers will try to pull a fast one and say it is a primary home when actually it is not and it is an investment home. This is called occupancy fraud.
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Government and conventional owner-occupant primary home loans require the homebuyer be an owner-occupant on primary homes for at least one year. The homebuyer needs to occupy the home within six months of closing and live on the primary home for at least six months and one day out of the year and cannot use it as a rental for at least one year. Federal regulators such as HUD, the VA, the FHFA, and the CFPB as well as state regulators can do random checks to see whether the borrower committed occupancy fraud. Here is an article about occupancy fraud written by Eric Jeanette of American Home Financing
https://gustancho.com/owner-occupancy-fraud/
gustancho.com
Owner Occupancy Fraud And Guidelines In Home Mortgages
Owner Occupancy fraud is a serious crime and falls under mortgage fraud. A borrower cannot state it is a owner occupied property if it isn't
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Mortgage Fraud is a no bueno
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Many buyers and even real estate agents and loan officers try to pull this owner occupancy fraud because they feel it’s not a big deal. They need to think twice and think hard. It is a huge deal and the Feds are fact checking closed homes randomly.