We just rented a HUD house in MD only to find out, by phone call, from the realtor that we have to live in it for at least 7-12 months. The tenants have signed a year lease and we are told that it is a felony that we have committed. Things changed finacially to make it the smarter option to stay in our original home. Is there anything we can do to avoid jail and/or fines? We had no idea we were brealing any laws.
1 Answer from Attorneys
Your interest rate on your mortgage loan was based upon owner occupancy, and at settlement you signed an affidavit pledging to live in the house for the requisite time period. That said, I have never heard of anyone being prosecuted for this by HUD. Your problem now is that if you break the lease the tenants could sue you. At this juncture the lender's interest is in receiving its mortgage payments on time.