Buy and hold question

[Sarah Morris]

Hi,

I was told I have to live in the property I just purchased for a year until I can  rent it out, as that is what the loan contract states.  Has anyone heard of this?  Does anyone know how I can get out of this loop whole?  Do you know the consequences for renting out the entire property out sooner then a year? I plan on getting a roommate once I move in to help with the mortgage. 

I purchased a home in del paso heights for 169900 at 3.5% interest for thirty years. Payment will be 1100 a month.  This was going to be my first buy and hold property. I decided not to say I was buying it for investment purposes to avoid having to put down 20% to purchase the home. 

Any input is appreciated~ 

[Roy N.]

@Sarah Morris

It sounds like you have a high-ratio mortgage under a housing programme such as FHA. These high ratio (low down payment) loans are only available to owner occupants, thus the requirement to make the property your primary residence.

There is no loophole, the consequence of renting out the entire premises without satisfying your pledge to make the property your primary residence is called mortgage fraud.  

You may be fortunate and no one check-up to confirm you are living at the address.  Or the lender may check and only decide to accelerate the note and call it due.  In the worst case, the lender checks, determines you never had the intent to make the property your primary residence, and brings forward charges of fraud.