Purchasing 4-plex using FHA, owner occupied, but not actually living there?
I'm looking into buying a 4-plex using about 10% down through the FHA program. All 4 units are currently occupied, 2 are month to month, but I would feel horrible evicting the people that live there. In my current situation, I don't necessarily have to live there, does this open me up to any sort of law suits from the gov't or anything? Also, I will have a few months of reserves but I was wondering that later on down the line if I needed to, could I rent all 4 units? Thank you for your time.
[{"id": "cl99402", "text": "Just a minor issue of federal fraud charges... an FHA loan requires owner occupancy.\n\nAlso: this is not commercial real estate.  Heck, by taking an FHA loan you're saying it's residential\n\n/not your atty", "replies": [], "depth": 1}, {"id": "cl995mb", "text": "Owner occupied is owner occupied as far as the government is concerned.  You will sign a multitude of documents at the closing stating that you intend on living in the unit. Do people lie about actually living in a property to get a better interest rate and a smaller down payment?  Heck yeah it happens all the time.  Would I risk it in this lending climate?  He'll no! If you don't plan on staying there get a NOO loan. What happens if some paper pusher with a bad attitude reviews your loan packet in a few months and they find out the truth? Not worth it. ", "replies": [], "depth": 1}, {"id": "cl99qet", "text": "How comfortable do you feel lying to the Federal Government and violating the contracts you sign with them?", "replies": [], "depth": 1}, {"id": "cl9e6o2", "text": "Thank you guys, you have successfully scared me out of a bad idea, this is exactly the clarity I was looking for. ", "replies": [{"id": "cles2h0", "text": "it's not that bad an idea.  people do it all the time.  you probably won't get in trouble, but if you LATER ON need an fha loan, they might not believe you in the future.", "replies": [], "depth": 2}], "depth": 1}, {"id": "cl9jy85", "text": "To be honest I had a friend do the same thing but with a single family residential house. No one ever asks or checks to see if he actually lives there. I think if you pay your mortgage, taxes, etc. on time no one from the bank will come by to check. Just my two cents. ", "replies": [{"id": "clarr3g", "text": "Here's the thing... There are random file checks from time to time on FHA loans. If they pull his file and see that none of the utilities are in his name, he's going to have some explaining to do. I've seen at least 10 instances of people getting penalized for trying to beat the system. Just my 2 cents bro. \n ", "replies": [{"id": "clb6gt9", "text": "Good to know how they check for that. My friend has the utilities in his name and has the tenants pay him the amount they used. \n\nAny idea of the punishment if he got caught? ", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}]