Occupancy Question

[CANative]

What if one of my daughters and her family moved into my house with me. Then I decided to go to Fiji for a vacation because her kids kept playing their war video games so loud I couldn't hear myself think. But then I liked it so much I moved in with a pretty Tahitian girl. Her father said I could stay there until I got bored and then I would have to go back home.

 

[alex gilbert]

Just to follow up - this one will be shown as Tenant Occupied with an explanation of the relationship between the owner and tenant in the report. I did e-mail Fannie, but did not get a definitive answer. They said:

"Alexander,
It appears that a case can be made for indicating either OWNER or TENANT.
While this is not a UAD-specific question, we often advise users to provide the best answer applicable, and simply explain your actions in detail somewhere in the report (addendum). Thanks for the question."

 

[ctapraser]

This is why they have an addendum.

 

[Mark K]

Her father said I could stay there until I got bored and then I would have to go back home.

Since you've moved into the home of a pretty Tahitian girl, one whom I'm hoping is half your age, I don't see boredom in your future. Fatigue maybe, boredom, no. In which case you'll never return and your old house is now "non-owner occupied".

Since the F/F options are O-O, tenant, or vacant, the only reasonable choice is tenant, by default.

Tenancy is a legal interest and the consideration does not have to be in the form of dollars. "Other Valuable Consideration" comes to mind, a term found on many deeds in this state.

The consideration you're receiving for the tenancy can be the eternal gratitude, love and affection, from your daughter for you leaving the country and letting her live there free.

 

[CANative]

Walter Mitty is my hero.

On topic though, it is as I have suggested all along. Fannie doesn't care what box as long as the appraiser explains.

 

[Buddy5]

Check 'Tenant' and comment that the property is occupied by the owner's daughter. Let the client decide whether to fund the loan or not.

Best advice.

 

[Peter LeQuire]

from the Dictionary of Real Estate Finance:

"tenant
One who holds or possesses real property; commonly a person who occupies and uses the property of another under a lease, although such a person is technically a lessee, not a tenant."


Also, I find it interesting/curious that the go to answer from FNMA had to do with UAD compliance rather than the root of the question about program (owner occupied, second home, investment) compliance. Just another look at the FUBAR GSE vacation pamplhet.

 

[KenAZ]

There are a few problems with this thread and the whole "Occupancy" theory.

1) You are allowed to be an an owner/occupant in 2 or more homes. IRS only allows two. You only have to "Occupy" the home for one night during the year. Even if the home is a rental, you stay one night and it is owner occupied.

2) In retirement communities in the Phoenix area, snowbirds commonly live in their homes in the winter and leave during the summer. You have 3 choices, and all three would be considered:

a) Occupied
b) Tenant - If it is rented while they are away
c) Vacant - If they are staying in the other home.

3) The appraiser should not be responsible for determining this. We do not take DNA evidence, if it is a purchase, we have no idea who is going to occupy. A high percentage of flips are actually vacant while it is fixed up. I am sure that on everyone of these appraisals, the appraiser assumed it was rented, when in fact it was going to be vacant, or technically occupied by the painters and drywall specialists.

How many of you mark "Vacant" when the owners are overseas for 6 months, or living in their other home. When the home is being babysat by relatives because the owners lives elsewhere . . . is that a rental? Of course not

It is a ridiculous requirement that appraisers make this judgement.

I did an inspection today, in which a relative met me in the home, because the owner was at work.

You make the call. Did the relative live there, was the owner lying? I am not getting paid enough to stake out the house, and I really do not want the liability of making such a call.

 

[Motown Matt]

There are a few problems with this thread and the whole "Occupancy" theory.

1) You are allowed to be an an owner/occupant in 2 or more homes. IRS only allows two. You only have to "Occupy" the home for one night during the year. Even if the home is a rental, you stay one night and it is owner occupied.

2) In retirement communities in the Phoenix area, snowbirds commonly live in their homes in the winter and leave during the summer. You have 3 choices, and all three would be considered:

a) Occupied
b) Tenant - If it is rented while they are away
c) Vacant - If they are staying in the other home.

3) The appraiser should not be responsible for determining this. We do not take DNA evidence, if it is a purchase, we have no idea who is going to occupy. A high percentage of flips are actually vacant while it is fixed up. I am sure that on everyone of these appraisals, the appraiser assumed it was rented, when in fact it was going to be vacant, or technically occupied by the painters and drywall specialists.

How many of you mark "Vacant" when the owners are overseas for 6 months, or living in their other home. When the home is being babysat by relatives because the owners lives elsewhere . . . is that a rental? Of course not

It is a ridiculous requirement that appraisers make this judgement.

I did an inspection today, in which a relative met me in the home, because the owner was at work.

You make the call. Did the relative live there, was the owner lying? I am not getting paid enough to stake out the house, and I really do not want the liability of making such a call.

In the original post, it was known (not a guess) that this was not the owner's primary residence. It was also known that it is a short sale. Short sales have a very specific set of requirements that must be met in order to qualify. If I am not mistaken (don't have time to hunt down a short sale contract in one of my workfiles, but I have read them in full), one of the requirements is that the home in the short sale is the primary residence.

Regardless of how the OP decides to handle the check boxes on pg 1, I would be extra careful to spell the situation out clearly (since it is known) in this situation so as to minimize my risk in case there was a case of fraud discovered down the road. Sure, it's not our job to be the occupant police, but it is on you to minimize your own risk by disclosing known facts.

 

[KenAZ]

I agree with you. The problem is that we only "Know" what we are told.

I have seen every type of deceit possible.

Renters pretending to be owners
Tenants claiming to be owners
Staged vacant homes pretending to be owner occupied
Renters kids pretending to be the children of the owner landlord

Maybe there is a 99 percent chance the OP is correct and the occupants have been correctly identified, maybe not. Did he verify ID's, take fingerprints, Look at birth certificates, etc.

I know I sound ridiculous but think about it. All you can verify is that there were some people in the home. The OP has no idea is they are relatives. I have seen it done before. The tenants get a slight discount in rent if the pretend to be relatives of the owner.

The problem is that I know I have been scammed on this numerous times. If I say that the owner is lying and that these are actually tenants and not owners, I can get sued if I am wrong. We already have too much liability. Let the SS bank make that determination. Have them hire detectives. We have enough liability. Our job is to determine the value of the house. In 99.9999% of the time, the occupance of a SFR has no bearing on the value.