Gene, so what is the real story: are you being transferred in less than a year, or are you trying to buy OO homes as an investment? According to my agent, HUD has started cracking down on OO-bidders that are really investors.
In my opinion, I don’t mind OO. It’s only one week delay, and they should get preference over investors. Everyone needs a piece of the pie. Of course, if houses in this area were listed at 50% of market value, I would be anxious.
I’m thinking about trying to buy a HUD home at auction but, as I’d like to turn the property sooner, am concerned about the 12 mo. Owner-Occupied requirement. Are there any creative ways around this?
What’s to stop you from moving in and then selling within a month or two? I presume that if you keep the house, you must remain in it for 12 months, but if you only own it for 2 months (living there during that time) and then sell, I’d think you would be okay. Have to check though. But if you can’t play by the rules, don’t play; penalties for messing with HUD are too severe.
I assume that you are referring to the sealed bid auctions. There is no 12 month occupancy requirement if you buy with conventional, non-owner occupied financing. If you have your buyer lined up by the time you settle, you can even do a simultaneous closing.
Of course, you will have to wait until the property is available to investors before your bid will even be considered.
Hi there, I have been buying HUD homes for a few years now via the Internet auctions. I have bought both OO and as an investor. I beg you to not try and skirt the rules on the year occ. for OO. My agent is very experienced in the HUD program and has a few contacts within the management company (Michaelson, Conner, and Boul) and he told me to be very careful now about the OO rules. You may have heard that they stopped the OND and Teacher programs due to fraud (at least until July 31, 2001), and the OO is next. You don’t want to be the one person that finally gets caught!! The only thing that I have tried is to buy the property through a relative. I lost the bids on the the two that I tried this with, but my plan was to let them move in (to make sure to fulfill the rules), and then turn the property. You obviously have to trust the relative because they will actually own the house despite the fact that you (me) put up all of the money!! It kills me now waiting for some prime properties to turn to Daily-All (which means investors can now bid). The appraisers in this area (NE Ohio) really short change themselves on some properties so it makes for good deals. Good luck.
You asked “what happens”. If you truly are transferred and it’s legit then you are fine. Meaning, you moved in, your bills, the home bills, your employer, etc. all have that address as your primary residence and you get a job transfer then that’s fine. You had intentions of and did for some time primary occupy the home. BUT, if you buy it as an OO and don’t ever move in (can’t show a phone bill even in your name for some time) and truly were deceptive, then they can immediately recall your loan and place you on a list that lenders have to check that would not allow you to purchase FHA for some time.