Mortgage Fraud red flag?

[Megan Stevenson]

I recently had a conversation with my lender and mentioned I would be purchasing a property as my primary residence.  I would live there while fixing it up then renting it out in a year.  She cautioned I need to be careful as this could be considered mortgage fraud if I do this multiple times in the same area.  Anyone have any insight please?

[Jay Hurst]

Quote from @Megan Stevenson:

I recently had a conversation with my lender and mentioned I would be purchasing a property as my primary residence.  I would live there while fixing it up then renting it out in a year.  She cautioned I need to be careful as this could be considered mortgage fraud if I do this multiple times in the same area.  Anyone have any insight please?

It is not fraud as long as you live in the property as long as the occupancy affidavit in the closing docs require. For conventional/FHA/VA that is 1 year. (some portfolio products might have a different term) So, as long as you do that you are meeting your obligation. HOWEVER, a lender might look at your past history and not approve your application because they know even if you meet your obligation they are really underwriting an investment property. That would be well within their right to do so but that would not be something to worry about on your first one or two. and really, not to big or a worry ever because you would be able to find lending even one would not do it.

[Megan Stevenson]

Thank you for the replies!!

[Robin Simon]

Quote from @Megan Stevenson:

I recently had a conversation with my lender and mentioned I would be purchasing a property as my primary residence.  I would live there while fixing it up then renting it out in a year.  She cautioned I need to be careful as this could be considered mortgage fraud if I do this multiple times in the same area.  Anyone have any insight please?

 Probably more about if you do it multiple times in the same area at the same time/overlapping - since you really can only "live" in one property at a time.  If its clearly spaced out and documented that you are only occupying one at a time while you keep fixing and moving should probably be OK

[Jacob Sherman]

it is ok to buy a primary once a year if you plan to rent your current and buy a new one . many lenders will not like it being in the same area