What Is a "Primary" Residence?

January 8, 2001, revised May 6, 2004, Reviewed February 2, 2011

"I understand that lenders penalize you if the house you buy is not your primary residence. My wife's job provides us with an apartment. We want to buy a home to live in on weekends and when we retire. If we will be living in the work apartment during the week, will the home qualify as a primary residence?"

Lenders do offer better terms to home-buyers who view the home as their primary residence. They have found that when borrowers have financial trouble, they will struggle harder to save their primary residence than a vacation home, or a property held as an investment.

The loan application asks whether you intend to occupy the property as your primary residence. Bon fide occupancy is defined as occupying within 30 days of loan closing and remaining for at least a year.

But occupancy itself is not defined. It certainly doesn't mean that you have to be physically present in the house most of the time, or even much of the time. For those who intend to be absent much of the time, as in your case, I would think the critical test is whether the house will be rented in their absence. Since you do not intend to rent it, and you do intend to retire there, I would say that you meet the test. 

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