What's the penalty for using VA or FHA loan for non primary residence?

[Tony Zhang]

I'm wondering what will the possible penalty to be if the property we purchased not as our primary residence by using VA or FHA loan after lender found out? Anyone experience have with this?

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Quote from @Tony Zhang:

I'm wondering what will the possible penalty to be if the property we purchased not as our primary residence by using VA or FHA loan after lender found out? Anyone experience have with this?

It's called mortgage fraud and is a federal felony.  I wouldn't recommend it. There are guidelines of how long you need to live in the property and under what conditions you can move. Those laws are there because we as tax payers are insuring the loan. It is not "funny money".

Just for giggles:

Mortgage fraud is covered under the 2009 FERA (Fraud Enforcement and Recover Act). This Act has highlighted the fines and prison sentences relating to mortgage fraud.

Mortgage fraud laws are divided into two specific categories, which are:

1. Fraud for housing, in which someone submits inaccurate information in order to be able to buy a home under more favorable terms
2. Fraud for profit, in which a real estate professional falsifies information so that they can get more money out of a transaction

"most states also have their own laws in place. If charges are brought, they usually also incur tax fraud and other fraud charges."