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Foreclosure/Owner Occupancy


I am buying a HUD foreclosed property, owner occupancy. I intend on living on the property.  The house that is on the property had dogs and cats in it constantly for several years, you can only imagine the smell. Not to mention it has no air-conditioning unit, it was stolen during the foreclosure process. What I'm asking, if the house in inhabitable I'm I forced to live in it for 12 months? I would like to remove the house and build another house on the property. Would I be violating the owner occupancy rule?

I can't speak for HUD but my experience has been that it is fairly common that houses are not habitable right from the start.  HUD does not expect someone to live in such housing until it is ready to live in.

The occupancy rule is there to prevent investor buyers from trying fake their way into the front of the line when buying.  Owner occupants always get priority.

If the house is truly uninhabitable, tearing it down to build a new one to live in would not be a violation in my opinion.  

Also remember that there are no HUD Occupancy Police out there watching your every move:>)  

Your intentions are good ones.

And you can always contact HUD to get a direct answer.  The problem is that like the IRS you can get different answers depending on who you talk to.



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Steele V. Propp


Can answer questions on all areas of the foreclosure process both judicial and non-judicial. Also on loss mitigation and foreclosure prevention including loan modification, short sales and deed in lieu of foreclosure. Also can assist with questions on purchasing property in foreclosure and already bank owned (REO, Real Estate Owned). Both as an investor and/or a homeowner.


I have 18 years of working with the foreclosure industry as a Foreclosure Specialist. Currently work with over 20 major lenders as well as a dozen asset management companies. Head up the Bank Owned Property Division of the Schatz Real Estate Group located in Minneapolis, MN. Regularly consult and advise consumers from across the county.

I belong to the Realtor Association at the National, State and Local levels. Also the Real Estate Investors Association. The Real Estate Educators Association. The National Association of Real Estate Consultants. The Short Sale Specialist Network. As well as number foreclosure related industry organizations.

Consumer Reports, Money magazine, Consumer Digest and many local and national newspapers.

Bachelors Degree work in Psycholgy and Economics. Masters Degree work in Counseling Over 15 real estate designations. Specialized ongoing study of foreclosures, short sales, mortgages and real estate.

Awards and Honors
Diamond Award from the Certified Residential Specialist (CRS) origanization. Chapter of the Heart as President of the Minnesota CRS Chapter. Consumer-Certified Real Estate Consultant Certified Distressed Property Expert

Past/Present Clients
GMAC Asset Management, First American REO, HomEquity REO, Keystone Asset Management, Greentree, REOWorld, ServiceLink and more.

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