If you were caught moving before the year is up, there could potentially be life-changing penalties as this is considered mortgage fraud by the FBI with penalties punishable by up to 30 years in federal prison or $1,000,000 fine, or both.  

Another downside is you loose on the advantages, of the Federal Tax Code, by not closing in the name of a LLC.

Another downside is you loose on the advantages, of the Federal Tax Code, by not closing in the name of a LLC.If you want to close in the name of a LLC, Mortgage Lenders will offer you Commercial Loan Terms (25-30% down, a 15-25 year amortization, and a ballon due in 5-7 years).

I understand that major banks refuse to do this because of federal laws.

Another downside is you loose on the advantages, of the Federal Tax Code, by not closing in the name of a LLC.

One way around the interest rate issue, however, is to simply raise the price and lower the interest to meet federal requirements.

When I first moved to the US a few years ago, I approached Advancial Federal Credit Union to inquire about getting a mortgage to purchase my 1st residential property.

I would recommend Navy Federal Credit Union as a lender due to them being military friendly and knowing the VA home loan process.

Call it $5710.Subtract annual mortgage interest deduction and annual property tax write-off multiplied by the formula a CPA gave me that includes their top state and federal marginal tax bracket, divided by 12, from it, note that I'm not a CPA confirm with your CPA.

I recall a discussion on BP about the Federal Trade Commission a few years ago, another top poster disagreed that the FTC had jurisdiction over real estate transaction, well, they do, you can go to the FTC site and search for sanctions and you'll find some hefty fines levied against individuals who violated advertising and truth in conducting business.