Buying a Primary Residence but with Leases in Place

[Vickie Liu]

Hi BP experts,

I'm looking to house hack in the greater Boston area by buying a 2-family property, using one unit as a primary residence and another unit for rental. I saw a good candidate but the problem is there're already 2 leases in place till 8/31/2023, which is 9 months away from now. I'm personally ok (even preferred to, it fits my timeline better) to move in by then. It seems tricky to the lenders due to the "you have to move in within 60(or 90) days of closing to call it a primary residence" rule. 

I talked to two lenders, one seems relaxed and saying if I can have an written agreement with the current tenants saying "they won't renew the lease" and, even better, with another agreement to lease out my current condo indicating I'm moving, they will take it as primary residence. The other lender seems strict about this but they have better rate... what are the more common practice for lenders?

I understand mortgage fraud is illegal ... but in my case, it will just be another 3-4 months with tenant in place to pay some rents and for me to get ready to move. Eventually I will move in and truly use it as primary residence. What's the odd this get caught? How serious will the consequences be? If this is not feasible, of course I will go ahead and  seek a way to break the lease but just want to learn from your experience. 

Thank you in advance!