Owner occupied purchase transition to rental property

[Alexander Quan]

Hi BP Community,

So my wife and I are in escrow for our first duplex purchase.

The financing option was:

1) 5% owner occupied

2) 25% investment purchase with 5% from us

and were going to get the remaining 20% down from mother-in-law HELOC. Since we did not have the HELOC process started and escrow opened...we had to decide what we were going to do or else we would lose the deal.

So as of now, we are doing 5% down owner occupied. I know that you need to technically live at the property for 1 year minimum before you can turn it into a rental property. However, what if you rent the two units out right away? What is the penalty?

The ultimate plan is to get the HELOC and Increase the equity to 25% to make it an investment property but that will take an additional 45 days. I do not want to keep it vacant for 45 days.

Should I worry?

Thank for your help and any advice would be appreciated.