Owner-Occupant An owner-occupant is a person who owns and lives in the same property. Lenders and housing programs treat owner-occupants differently from absentee owners or investor-owners, and certain loans and government incentives are available only to owner-occupants. How the designation works for mortgages
* Mortgage applications typically require you to state whether you intend to occupy the property as your primary residence.
* Common lender guidelines: move into the home within 60 days of closing and occupy it as your primary residence for at least 12 months.
* Buyers who purchase in the name of a trust, or who buy a vacation/second home, part-time home, or a property for a child or relative, generally do not qualify as owner-occupants.
* If you tell a lender you will live in a home but intend to rent it instead, that is occupancy fraud and can carry serious consequences.
Owner-Occupant Certification (HUD)
* Some transactions require a signed Owner-Occupant Certification (HUD-9548D) to verify intent to occupy.
* The form is typically signed by the buyer and the real estate agent and filed with the sales contract.
* Submitting a false certification can result in substantial penalties, including heavy fines and possible imprisonment.
HUD programs and incentives
* Certain HUD programs favor owner-occupants. For example, the Good Neighbor Next Door program offers a substantial discount on HUD-owned homes to eligible public servants (teachers, firefighters, law enforcement, emergency responders) in designated revitalization areas.
* Discounts often come with minimum occupancy requirements (e.g., a three-year owner-occupancy obligation). Leaving early can trigger repayment of a prorated portion of the discount.
Special cases
* Second home: A second home is not considered owner-occupied. If you later make it your primary residence, you may be able to refinance it as such.
* Duplex: A duplex qualifies as owner-occupied if you live in one of the units as your primary residence.
* Accessory Dwelling Unit (ADU): A property with an ADU qualifies as owner-occupied if the owner lives in either the main home or the ADU.
Pros and cons of owner-occupied investment properties Pros
* Potential tax benefits depending on use and local rules.
Access to certain government buying-assistance programs and HUD foreclosures.
Rental income can offset your housing costs and help build wealth. Explore More Resources
Cons
* Close contact with tenants—possible privacy and lifestyle impacts, especially in duplexes or shared buildings.
Potentially higher insurance costs or different coverage needs.
Increased landlord responsibilities while living on-site; possibility of sharing living space with tenants (roommates). Practical considerations
* Check program-specific residency minimums before relying on discounts or special loan terms.
* Be realistic about living with tenants—consider personality, boundaries, and conflict resolution skills.
* Maintain transparency with lenders—misrepresenting occupancy intent can have legal and financial consequences.
Bottom line Being an owner-occupant can unlock financing options and government incentives that make property ownership and small-scale investing more attainable. However, it also brings landlord responsibilities and lifestyle trade-offs. Understand occupancy requirements, certification rules, and program conditions before committing. Explore More Resources