I never bought a HUD property as O/O but I understand from a broker that this O/O certification is required of all O/O purchases.
I told him to speak to a RE attorney about this, and the RE attorney said there its a gray area and that nothing in HUDs contract says any time frame.
neighborhoods in Denver, a professional landlord owner is much better than an owner occupant buying with 3.5% down and living paycheck to paycheck.
The conventional wisdom is that an owner occupied house will be maintained better than an investor owned home.
I think intent is the key word here. I had a client of mine buy a HUD home as an owner occuapnt, all Nike Air Max 95 Grey And Orange
Response to Chris Martin and Jon Holdman :
side note, sometimes REO agents bring me deals before they hit the MLS, and I have a feeling it may not be morally right, so should I still buy them? .
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Buying Owner Occupant HUD homes as a Investor
Why should HUD have a rule that a home is offered first only to owner occupants? (assuming a cash sale)
Originally posted by Kevin Dickson:Well, this policy discriminates against investors. That not fair, is it?
Often you will find that the REO listing agent has been given an exclusive listing period, where the property is allowed to be kept off of the MLS while the listing agent identifies whether he can get a buyer for it. Once the period of time for the exclusive listing expires, then they are required to put it on the MLS for all agents to bring buyers. Don let it bother you, not only is this un ethical it is illegal. Claiming you an owner occupant with the intent on flipping sounds like mis representation/fraud to me. I also thought HUD makes you sign an affidavit that you are buying solely for an owner occupant home.
"Occupancy type. Mortgages on properties occupied by the borrower as a primary or secondary residence tend to have lower credit risk than mortgages on investment properties."
So I think we are all in agreement that no one should commit loan fraud.
To make my point in a slightly different way:
Note I not saying that breaking the rule is OK. I saying that let worry less about the rule breakers and more about eliminating a rule that doesn make sense anymore.
Well, this policy discriminates against investors. That not fair, is it?
As investors, however, I think we also should be in agreement that living in the home you own doesn automatically make you a better homeowner.
Originally posted by Greg P.:. On a Air Max Deluxe 1999
cash. He rehabbed it while living there, and then called me and asked what he could sell it for fixed up. He has decided to move to a better area now. His intent was to live in the home, which he has.
What? Investor loans, in general, carry a higher risk. This is fact, as detailed in Fannie Mae latest 10 K on page 154.
Regarding the law, look hard at the document an O/O is required to sign. It says "Warning: Falsifying information on this or any other form of the Department of Housing and Urban Development is a felony. It is punishable by a fine not to exceed $250,000 and/or a prison sentence of not more than two years."
Some rules make sense. But look hard at this one supposedly an owner occupied house is better for the neighborhood, and better for the country. That why they created this policy. (Is it a law?)
Well I find that reasoning specious, unproven, and unfairly biased against professional, experienced, and diligent investor/landlords.
Of the foreclosures I looked at recently, the ones in the worst condition were the ones that were owner occupied.
Regarding time frame and intent, the HUD form 9548D, Individual Owner Occupant Certification clearly spells out terms and conditions of the contract: I/We . submit this offer to purchase the property located at . as an owner occupant purchaser. I/we certify that I/we have not purchased a HUD owned property Air Max 98 Snakeskin Supreme within the past 24 months as an owner occupant. This offer is being submitted with the representation that I/we will occupy the property as my/our primary residence for at least 12 months.
I agree with all your points. Unless I misunderstood, the OP wasn talking about the loan, just the purchase offer/contract.
The reality is that a lenders underwriting and pricing reflect the current risk of loans, taking into consideration the higher risk characteristics based on performance history. That on page F 68. You can find similar verbage from small commercial lenders.
If the investor pays cash, there no risk to a lender, or loan fraud.
Originally posted by Kevin Dickson:Some rules make sense. But look hard at this one supposedly an owner occupied house is better for the neighborhood, and better for the country. That why they created this policy. (Is it a law?)
Hello, I came across something concerning. I done some research and noticed a rehabber buying homes on HUD as a owner occupant but then a couple months later, flipping it to a end buyer. I not a tattle tale, but why can people play by the rules? It seems like this business pushes people to the limits morally because of money and/or greed. I understand, but why? I not going to say anything to this guy or anyone else, but people shouldn be doing this. On a side note, sometimes REO agents bring me deals before they hit the MLS, and I have a feeling it may not be morally right, so should I still buy them? Tough decisions.
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