HML tells me I Cant get a Investor loan unless...

[Anthony D.]

As a newbie I was having a general first conversation with a HML about loan program and terms. I happen to mention that I don't have a primary residence in my name and He told me that I can't get a investor loan for a investment property from a bank unless I already have a primary residence in my name. so I'm thinking, what if someone wants to invest but not ready to buy a primary residence yet, it just dont seem to make sense to me or did I misunderstood him . I Never heard that before just wondering if that is so or if anyone one else can shed some light on that. Thanks

[Stephanie P.]

@Anthony D.

@Melvin list and others are correct when they write "you don't need a primary residence to purchase an investment property. This loan officer is giving you the wrong information."

Here's what's going on though. Your HML is providing "business purpose loans" for investor properties. Those loans are not governed by RESPA or Dodd Frank and your HML is trying to make sure that there is no gray area where a regulator could think you're using an HML to purchase an owner occupied property; particularly if he doesn't have a NMLS number.

For the most part, people who invest in real estate buy their first home to live in it, not as an investment and it's a red flag to a regulator.  A few large business purpose loan companies were requiring the investors to own a primary residence as a precaution after they did some loans owner occupied loans with non-owner or non-Dodd Frank guidelines and got burned.  Now those loans are not only not sell-able but they can't foreclose on them either.  

Not owning a primary residence makes you the exception, not the rule in this situation.