Can you "house hack" a condo?

Question

As I understand it, house hacking would traditionally mean living in one unit of a multi unit property for at least a year and that would allow you to rent out the remaining units and then the unit you would live in after you complete your year. This would get you better mortgage rates with potentially less money down. Someone correct me if I'm wrong. I'm wondering if I can do the same thing with a 2/3 bedroom condo. Living in one bedroom for a year and renting the other rooms out to tenants and then renting out all three the following year. I'm not sure if that's allowed or if lenders would say no to that. To be clear, I'm not interested in what they "like", only what wouldn't constitute mortgage fraud and I wouldn't give any info to them that I don't have to.

The second part of that is, could I have the home be my "residence", for mortgage purposes, if I didn't physically live in it most of the time? Sounds stupid, I know. I wouldn't rent that room out to anyone for the first year, I would have the bills in my name and pay them, and I may stay there every now and then (I'd have a bed and some clothes there). Would it be any different than if I really did move in and then spent my days traveling? Only reason I ask is that it would be much more inconvenient for me to be there all the time as opposed to where I am now (where I live for a cash month to month, no bills in my name). And before someone asks why I would want to stay where I am and pay rent instead of move in there and live for free or cheaper... it would add 1.5 hours each way to my commute on public transport whereas I currently drive 15 mins with barely any traffic. Losing 60 hours a month isn't worth it.

What would be enough to call the place my "residence" on paper. Unit in my name, bills in my name, and me not claiming another place as my primary residence would be enough right?

Marco G. · Answer

@Tony Alvine

Hacking is easiest done when you’re younger for exactly this reason, you’re more likely to have experienced shared living arrangements recently.

I think you’ll have a hard time getting a definitive answer on whether “this is fraud” anywhere. When signing final mortgage papers and/or applications there are at least two points where I’ve had to sign under penalty of perjury that I “intend to occupy the property” as a “primary residence” or “owner occupied property” for either at least the next sixty days or one year. One tends to be on the application and the send a certification or declaration of intent to occupy.

What I think can more safely be said is that what you are describing in your latter post still sounds like it’s your primary residence. What you’re saying in your original post a bit less so given the commute time comment. It’s a federal crime and you’ll have those signatures (and these posts if you’re using your true name) prominently featured as evidence against you if your local federal prosecutor gets wind of it and takes a contrary interpretation than yours.

All of the above with the caveats that you shouldn’t rely on this because this isn’t legal advice, I am not a federal criminal lawyer or qualified to give you legal advice, and you should consult a lawyer if you want legal advice.

Good luck starting out. Your general idea to house hack is a good one, but this significant detail needs to be worked out.

Marco G. · Answer

@Tony Alvine

Yes you can house hack a condo by renting out a room or rooms and living in one. It’s the same concept as multi unit, your mitigating your monthly expense by renting an area you’re not using. It’s a little more difficult to actually live with someone or ones than next to them, but the money is worth it. I furnished all except the room to be rented since I was living there. I also found it easier to add $50 and say all utilities and internet are included rather than split odd numbers every month or two.

As to the bit about not actually living there full time, that’s up to you but I think you know your answer.

Marco G. · Answer

@Tony Alvine

Oh, and you have a lot more latitude in selecting roommates than you do tenants since you’re living with them.

Patricia Steiner · Answer

There's a lot in your posting but here's the short answer on renting a condo:

Condos are governed by HOAs and the bylaws dictate whether units can be rented and under what conditions.  Most require that the property manager/HOA screen and approve the tenant.  I seriously doubt that you'll find a Condo community that will permit the activity you're proposing.  There's a reason why house hacks are done with "houses."

I'm not going to address the whole lender question because claiming a property as your "residence" for mortgage purposes is fraud. It also impacts the HOA so all that liar, liar pants on fire stuff is just not cool - or legal.  There are enough lending resources (not referencing Hard Money) that you can obtain financing with good terms that you can drop the "I don't care what they like, I won't give them..." bravado.  You're either the real deal or you're not.

Learn more before you leap into something that will be hard to undo.

Andrew Freed · Answer

@Tony Alvine - As many people alluded to, this is the same as purchasing as single family and renting out the rooms as long as the HOA allows it. If you do move forward with this plan, I would recommend becoming a member of the trustees so you have some say in future rules and regulations about renting your units. Protect your interests.

Regarding this as your primary residence, can you work from home for 3 days out of the week at your condo? If you are there for a majority of the week, you should be satisfying the requirement that this is my primary residence.

Tony Alvine · Answer

@Marco G.Thanks for the reply! I actually don't know exactly about not living there full time. If the laws pertaining to mortgage fraud are very strict in that regard then obviously I'd rather not try to do anything to violate that. I'm not trying to skirt the system by "living there" but getting a month to month cash tenant or anything like that. I'm just curious if have stuff there and pay the bills, just like I'd do if I did live there, but spent a lot of my time elsewhere, if that's definitely mortgage fraud. I wouldn't be paying rent elsewhere and this would still be the only place with my name on the documents and the bills.

As for roommates, I actually don't mind them... but I'm also quite a bit younger so most of what I've known is roommates.

Tony Alvine · Answer

@Patricia Steiner I'm not interesting in trying to get around mortgage fraud but just interested in what exactly constitutes mortgage fraud. I'm not going to be renting out the one bedroom or trying to put someone in the bedroom unofficially with cash. It would be perfectly legal for me to live in one bedroom as my residence and rent out the remaining rooms. Obviously, I'm not looking at any units where an HOA wouldn't allow rentals in the first place so HOA won't be an issue. If I did live in that room and spent most of my time traveling or visiting friends and family, that wouldn't be much different than if I had a bed and clothes there but didn't spent much time there. Also there really was no "bravado", it's just some people tip toe around what others like and dislike or what's ethical and non-ethical. I simply meant to say I only care about what's illegal and what's not.

A reply simply telling me to learn more without providing much of an answer when I'm asking something in the "starting out" section is a bit ridiculous if you ask me. From my previous experience with forums on other topics, I'm almost positive you're supposed to have something constructive to add or you just continue going about your day... but perhaps this forum operates differently.

Can you "house hack" a condo?

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