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We have an offer on a property we intend to live in as a primary residence. It's normal for these loans to want occupancy within 60 days.

In this case the seller wants to rent back for roughly 50 days.

That's not a problem for me but what would happen if something went wrong with the move out or they needed another month?

Would we be in trouble with the bank? In trouble with the law? We fully intend to make this our primary residence but I'm curious if we're putting ourselves at legal risk with the short term rent back?

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It depends on the wording in the affidavit of occupancy that you sign. All that I've seen make it clear that you're simply affirming your intent. So as long as you aren't misrepresenting your intentions there's not a strong basis for fraud charges. Turning it into a rental without moving in and claiming that's not what you intended would not hold up, but I've never heard of moving in slightly after 60 days being an issue.

Nobody comes to the house on day 60 and makes sure you're there. You'll likely change over the utility payments to your name and can file a change of address with the post office prior to day 60 to make clear that you are indeed moving in.

The best thing to do is to confirm with your lender and review the documents you'll be signing.

  • In fact, I rented back my current house to the previous owner for about 3 months. No problems, though it was almost 20 years ago so practices might have changed. – jamesqf Feb 6 '18 at 4:35

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