USDA Incentives for a house hack? Possibile???

[Jose Aguilar]

Hello all, I am in the works of making my first real estate move. I have my eyes on a mulit-unit home. I do plan to live in the home and rent out the other unit on the lot. My LO mentioned a USDA incentive that pretty much pays for the down payment and closing costs for low income communities. I know that program requires you to live in that home but my question is for how long? Do I have to live in the property til I pay off the mortgage? Is there any loops of some some sort? Thank you in advanced. 

[Gurbeer Sangha]

Hi Jose!

I love seeing other investors from Fresno on the platform! From my understanding, the residency requirement for a USDA is only one year. The rule is that you have to move into it within 60 days and live there for at least a year without moving out. You're not required to be there for the whole loan.

As for a loophole, the only one is not telling the lender or the USDA that you're not living there and hope that no one checks up on it. They almost never do and a lot of people take this risk. They usually just have the mortgage bill and tax bill still go to the property rather than their true mailing address. I, however, am not comfortable with that kind of risk and I personally don't recommend to any of my clients to do that.