2nd unit in the same complex: Lender wants to know the motivation

[Rameez Balagamwala]

I bought the current townhouse with an owner-occupied mortgage, and have continuously lived in it for 12+ months. 

I have now made a deal with a neighbor in the same complex, buying that unit as a residential property again, and move into it. 

This is obviously so that I can make use of the 5%-down, while I rent out the current unit. The plan was the repeat this every 12 months - however, the lender's underwriter has now asked this:

"What is the obligator's motivation to move into another unit in the same complex?"

I was under the impression that once 12 months are over, it is fair game to get another property as residential. How should I answer this?

-Rameez

[Andrew Kerr]

Rameez Balagamwala the 12 months is to satisfy the requirement on your current loan.
It doesn’t guarantee that an underwriter would approve a new loan, you need a good explanation and wording it like you did probably won’t work. Moving in the same complex probably won’t work unless you change the loan to a non owner occupied loan. I have seen underwriters turn down deals where folks move from a SFR to a duplex in the same city as it is outside the norm.

Keep mind underwriters are paid to be conservative.