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We are buying a new home with owner occupied financing, but cannot move into it for about 9 months and would like to rent it temporarily before we move in to offset costs. Once we move in we will stay as permanent residence. Is this illegal? Are we likely to be caught? What could happen if caught?

  • Can you edit and add country tag. Do you plan to inform the financing company? – Dheer Jun 20 '17 at 4:55
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I'm assuming this is the US.

Is this illegal? Are we likely to be caught? What could happen if caught?

If you sign an occupancy affidavit at closing that says you intend to move in within 60-days, with no intention of doing so, then you'll be committing fraud, specifically mortgage/occupancy fraud, a federal crime with potential for imprisonment and hefty fines.

In general, moving in late is not something that's likely to be noticed, if the lender is getting their money then they probably don't care. Renting it out prior to moving in seems much riskier, especially if you live in a city/state that requires rental licensing, or are depending on rental income to carry the mortgage.

No idea how frequently people are caught/punished for this type of fraud, but it hardly seems worth finding out.

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