What is an owner-occupier?

An owner-occupier is a resident of a property that holds title to it. On the other hand, an absent owner holds title to the property but does not live there. An absent owner is a type of absent owner.

An occupying owner owns a property and resides on the same property, while an absent owner does not live on the property.

Operation of an occupying owner

When applying for a mortgage or refinancing, the lender will need to know whether the borrower will be an occupying owner or an absent owner. Certain types of loans can only be made to homeowners and not to investors. The request will generally state “The borrower intends to occupy the property as his principal residence” or a variant thereof when the borrower becomes the owner. Generally, for a property to be occupied by its owner, the owner must move into the residence within 60 days of its closure and live there for at least one year.

Buyers who purchase property on behalf of a trust, such as a vacation home or second home, part-time home, or for a child or parent, are not considered to be homeowners.

Homeowners are generally not required to notify their lender if they have left an owner-occupied home where they have lived there for at least 12 months. The intention when applying for and receiving the loan is important. If a buyer informs the lender, he plans to live in a house knowing that he intends to rent it, which is considered to be occupancy fraud.

Key points to remember

  • Homeowners are residents who own the property where they live.
  • Some loans are only made to homeowners and not to absent owners or investors.
  • To be considered owner-occupied, residents must generally move into the home within 60 days of closing and live there for at least one year.
  • The Department of Housing and Urban Development offers special programs for those who plan to be homeowners, such as the Good neighbor next door program, which offers a discount to first responders who live on a property for at least three years. .

Special considerations

Lenders can offer special programs to buyers who intend to live in a property rather than renovate, sell or rent it. As proof, such a buyer must sign an owner-occupant certification document. The homeowner certification form, also known as HUD-9548D, can be found on the website of the United States Department of Housing and Urban Development (HUD). It must be signed by the buyer and the real estate agent and deposited with the sales contract. Any presentation of a false certificate of owner occupying on a property risks heavy fines of up to $ 250,000 or a prison sentence of up to two years.

There is some flexibility in the loan guidelines for borrowers who intend to live in the house but must move within 12 months of the loan start date. Loan documents may specify the minimum residence for certain programs. For example, the Ministry of Housing and Urban Development offers a 50% discount on houses belonging to the HUD to firefighters, police, teachers and emergency workers. The Good Neighbor Next program encourages these professionals to settle in revitalization areas. The HUD discount connects to a three year owner occupancy requirement. Borrowers who leave before the end of the period should pay HUD a proportional part of the rebate they received.

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