Owner occupied financing refers to when a borrower for a property purchase will be staying and occupying said property. This is a preferred lending option for most lenders and financial institutions, because with the borrower living there they are more likely to follow through with payments and not default on the loan. The borrower is typically expected to reside in the home for a period of at least 12 months. 

Being considered safer loans, this financing option carries lower interest rates, fees, and penalties than a second home or investment property. 

Common Examples of Owner Occupied Financing

FHA Loans

These loans are meant for people trying to purchase a primary residence. With lower credit requirements and initial deposit, these loans are great for people starting out. 

VA Loans

Designed for veterans, these loans offer attractive benefits for anyone who is currently serving, or served in the military (including family & spouse).

Conventional Loans

While the usual initial deposit on a conventional loan is 20% of the purchase price, some lenders may offer more attractive deposit requirements, sometimes as low as 3%. 

Talking to a lender is important to ensure you get a deal that works with you. 

Speaking to a bank or lender about their requirements for owner occupied financing is important, to ensure that you meet those requirements and won’t be committing fraud. 

It’s always best practice to shop around and see your options when looking to finance a property purchase.