Fraud? Or what are the repercussions?
Location is Texas, a community state. This situation has just come up and we are exploring if there might be some open options to pursue. Supposing you closed on a primary sfh with 5% down conventional loan to wife only. Then in a month or two a 4plex beckons at your husband. Is he eligible to apply for a 3% down, conventional loan to occupy one unit as a primary? I suppose for tax purpose the homestead designation will move to the new 4plex (no objections) but will this new loan trigger any adverse charges, events or repercussions if any, or even to wife's loan from current lender or from any other entity? Or will the sfh be transitioned as a second home and what effects would come about if so?
Alternatively can you buy the 4plex as a secondary home with intention of occupying one unit as a second home and utilize 3% down on a conventional loan, or what would be the changes?
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#3 Managing Your Property Contributor
My understanding is the low down payments are only if you will live there. so if the husband and wife are not living together and each plan on living in the separate homes, it might work. But if they aren't going to each live in their separate homes, it is fraud.