Serial House Hacking, Underwriters

[Anthony Angotti]

Hello,

I currently have two duplexes that I have lived in and kept. Both are on conventional owner occupant mortgages and I will have lived in each for a year minimum once I close on a new property.

I am looking to move early next year to the third owner occupied 2-4 unit building. 

Can anyone let me know if this will likely cause issues with an underwriter or what I should be asking banks to make sure that they will fund the loan as an owner occupant for the third building? Front end and back end loan ratios meet the guidelines for conventional lending based on likely new mortgage amount. 

Thanks!

Tony

[Chris Mason]

Originally posted by @Anthony Angotti:

Hello,

I currently have two duplexes that I have lived in and kept. Both are on conventional owner occupant mortgages and I will have lived in each for a year minimum once I close on a new property.

I am looking to move early next year to the third owner occupied 2-4 unit building. 

Can anyone let me know if this will likely cause issues with an underwriter or what I should be asking banks to make sure that they will fund the loan as an owner occupant for the third building? Front end and back end loan ratios meet the guidelines for conventional lending based on likely new mortgage amount. 

Thanks!

Tony

 You just need to make sure the specific house makes sense. For example if you currently live in the nice part of town 5 minutes from work, and are buying in the hood & your commute will double, that can be a flag for occupancy fraud (the most common type of fraud), which can delay closing or prevent it entirely. 

A letter from you highlighting the positive features of the new home you find attractive (bigger yard for my dog, another bathroom for my teenager, etc), paired with evidence that you did in fact historically owner occupy for a year (old utility bills, old mortgage statements, old paystubs, etc, addressed to your then-current residence work), would make it pretty rock solid, but this is still ultimately an underwriter judgement call.

Because preapprovals are not property specific, they can never incorporate this, so it's on you to set yourself up for success on this front. Fortunately it appears you have that history of occupancy for a year, so the paperwork addressed to your then-primary residence shouldn't be a problem.