What is Occupancy?
Occupancy refers to how a borrower intends to use a property, such as a primary residence, second home, or investment property.
Occupancy is the classification of a property based on how the borrower will use it. Lenders categorize loans as primary residence, second home, or investment property. Borrowers meet occupancy requirements because loan programs have different rates, down payment minimums, and underwriting guidelines for each type. Watch for occupancy fraud, which occurs when a borrower misrepresents their intent to get better terms. Lenders may verify occupancy through documents, credit inquiries, and post-closing checks. Investment properties typically have higher rates and stricter requirements.
Written by Ralo's editorial automation and checked against the site's copy rules.