Can you have two owner occupied homes? (approved, credit, mortgage rates)

[ceci123]

Hi, I currently own a home (paid off) and want to buy a home in a better school district for my child within 20miles away. I do not want to sale my current home as I want to keep it as a back-up or if someone wants I can rent it out or just let my in-laws live in it.

Question. Is it possible to get a owner occupied mortgage on my second home? If so, how do I explain this to the banks? Keep in mind that my first home is paid off.

Thank you.

Ceci

[luluwas]

yes you can own two homes and have two separate mortgages. not sure if you have to declare one as a primary home and one as a second/vacation home. a third home would be an investment property even if you occupy it. just different way to get a mortgage usually putting at least 35% down.

[FalconheadWest]

People move everyday around the country. Many people buy their new house without selling the first.

[MillionaireMind]

The best scenario would be to make your new home your primary and as a default your current home would become your 2nd home. As long as your are currently employed and credit history is good you would get approved no problem since the other house is completely paid off. You would just have to provide explanation why you are moving, and if you actually spend the majority of your time at the residence it would be treated as a primary. Moving to a better school district is a valid reason. It happens quite often.

[chet everett]

First off to directly answer your question it is IMPOSSIBLE for a borrower to have other than ONE owner occupied primary residence. The home that is your LEGAL residence is what the lender will want you to have cash 20% down payment for standard financing. You will be required to sign documents stating that you WILL occupy that home as your primary residence. Lying is something that CAN AND HAS resulted in lenders coming after borrowers for in both civil and criminal cases.

If you intend to retain ownership of another residence and you do NOT USE IT as a secondary residence it will be an investment property. If you own it free and clear it will likely NOT hurt your ability to borrow for new primary residence. It will NOT be permsible to consider this a "vacation home" and you will not be able to treat it as such for tax purposes -- Is My Vacation Home Tax Deductible | Vacation Home Tax Deductions

If you intend to move to a better school district this is completely fine but if you intend to merely own a second home and attempt to remain in your existing home this can lead to problems: Oak-Park-school-officials-say-probe-led-to - Chicago Sun-Times

[mdcrim]

Why don't you just take a mortgage out on your current home (cash out refinance) to buy the second one with?

[joe moving]

I'm assuming this is about how to obtain a mortgage. It sounds like you will live in the new home. That becomes your primary residence. You would put that on all applications.

It shouldn't be a big deal assuming you can pay for the new one and the taxes on the old one on paper.

[Palomap]

Originally Posted by chet everett

First off to directly answer your question it is IMPOSSIBLE for a borrower to have other than ONE owner occupied primary residence. The home that is your LEGAL residence is what the lender will want you to have cash 20% down payment for standard financing. You will be required to sign documents stating that you WILL occupy that home as your primary residence. Lying is something that CAN AND HAS resulted in lenders coming after borrowers for in both civil and criminal cases.

If you intend to retain ownership of another residence and you do NOT USE IT as a secondary residence it will be an investment property. If you own it free and clear it will likely NOT hurt your ability to borrow for new primary residence. It will NOT be permsible to consider this a "vacation home" and you will not be able to treat it as such for tax purposes -- Is My Vacation Home Tax Deductible | Vacation Home Tax Deductions

If you intend to move to a better school district this is completely fine but if you intend to merely own a second home and attempt to remain in your existing home this can lead to problems: Oak-Park-school-officials-say-probe-led-to - Chicago Sun-Times

Chet,
I think you are spot-on on your reply. I have also heard that if you have a child (with a disability), or elderly parent, you can purchase a second home for them, and have 2nd home qualify, and be consider an "owner occupied" also qualify for "owner occipied" mortgage rates, IF the second home is purchased for your disable dependant (child), and he/she is the one primarly residing on this second home, but I am the one qualifying and paying the mortgage. Are you familiar with this provision?, do you where can I get more information about it? . Are there special lenders I can contact to seek more help on this topic? Thanks!

[SmartMoney]

Originally Posted by Palomap

Chet,
I think you are spot-on on your reply. I have also heard that if you have a child (with a disability), or elderly parent, you can purchase a second home for them, and have 2nd home qualify, and be consider an "owner occupied" also qualify for "owner occipied" mortgage rates, IF the second home is purchased for your disable dependant (child), and he/she is the one primarly residing on this second home, but I am the one qualifying and paying the mortgage. Are you familiar with this provision?, do you where can I get more information about it? . Are there special lenders I can contact to seek more help on this topic? Thanks!

I just recently started to research this for someone, from the Fannie guide:

The following table describes conditions under which Fannie Mae considers a residence to be a
principal residence even though the borrower will not be occupying the property.
Borrower Types Requirements for Owner-Occupancy
Multiple borrowers Only one borrower needs to occupy and
take title to the property, except as otherwise
required for mortgages that have guarantors
or co-signers. (See B2-1.2-04, Continuity of
Obligation.)
Parents wanting to provide housing for their
physically handicapped or developmentally
disabled adult child
If the child is unable to work or does not have
sufficient income to qualify for a mortgage
on his or her own, the parent is considered the
owner/occupant.
Children wanting to provide housing for
elderly parents
If the parent is unable to work or does not have
sufficient income to qualify for a mortgage
on his or her own, the child is considered the
owner/occupant.
Note: If a property is used as a group home, and a natural-person individual occupies the
property as a principal residence or as a second home, Fannie Mae’s terms and conditions
for such occupancy status as provided will be applicable.

The cut and paste is rough, so you can find it here in the Fannie Mae guidelines, page 269.
https://www.fanniemae.com/content/guide/sel102213.pdf

You most likely will need someone that can take you Fannie Direct (ie, no overlays) -

[thelopez2]

Originally Posted by Palomap

where can I get more information about it? . Are there special lenders I can contact to seek more help on this topic? Thanks!

You don't need "special lenders" they either do it or they don't. I think more often than not , they can do it , but the person that you talk to doesn't know they can do it.

I don't think you'll have problem trying to find a mortgage broker to do this type of loan.

Also nice to see people actually read the Fannie Mae guidelines.

This is a year old thread which, you might actually get better traction and there will be less confusion if you just started a new thread. Reading old threads with bad information is just too frustrating.