Owner Occupied Loans

[Michael Sellers]

Hi everyone,

I live in a more expensive market, so I’ve been considering using an owner-occupied loan as to only have to provide 3.5% (or something similarly low) for the down payment. I’m priced out of my local market without a low down payment loan or some other creative solution.

I have a very advantageous living situation right now, so it doesn’t make sense to me to sacrifice that for a house hack. That said, my question revolves around the “intent” portion of an owner-occupied loan. I’ve heard it mentioned several times on the podcast (most recently David talks about it on episode #469) that if you don’t like your living situation in a house hack, you can just move out whenever so long as you had the intent of living there when you bought it.

Since intent is entirely subjectively and seemingly impossible to prove, could I buy a 3-unit (for example) and rent out 2 units and keep the 3rd vacant for a few months before moving out? I could even renovate the vacant unit while it isn’t rented out. I might be cash flow negative for the short term, but that would be a small sacrifice for getting into a multi-family property for low money down in my area that will no doubt appreciate over the long term.

I’m certainly not trying to get in legal trouble, but I also have no problem playing the game within the rules.

Thanks!