Lenders Advice on Primary home becoming a rental with a HELOC

[Rhonda McDaniel]

Has anyone had trouble with your first lender when you changed a primary residence to a rental? We did this for two years, and every 12 months the lender had us submit a letter for "approval" to their main office. It was always approved, but I thought that was strange. Also now we have a HELOC on our primary residence with the same lender. I'd love for this primary to be a rental, without rocking the boat on our HELOC. Our HELOC is a 10 year agreement. We are in the first 12 months of our HELOC. Some language in our particular HELOC says:

"We can terminate your account, require you to pay us the entire outstanding balance in one payment, and charge you certain fees if: (1) you engage in fraud or material misrepresentation, by your actions or failure to act, in connection with any phase of your line of credit (2) you do not meet hte repayment terms.'

I understand number two, I don't understand number 1 so much. What exactly is "material misrepresentation?"