25 Sep Do I have to worry about mortgage fraud when I apply?

Q. With all this talk about politicians and mortgage fraud because they supposedly said each of their two houses are primary homes, I have a question. I have a primary home and I’m considering a second home, with the idea that I will move there as my primary home in a couple of years when I retire. Do I have to call it a second home for the mortgage today even though it will become my primary? I don’t want to get in trouble but of course I want the best mortgage rate.
— Homeowner and buyer, too

A. This certainly has been a hot topic in the news.

The Trump administration has accused several government officials and former government officials of lying on mortgage documents to receive a more favorable interest rate. We’re not going into those cases here.

But let’s discuss the issue.

When applying for a mortgage, you will need to declare on your application if the house is going to be your primary residence, second home or investment property, said Marc Calicchio, vice president of mortgage lending Nutley-based Rate.com.

If you are going to declare the house as your primary residence you will need to occupy the home as your primary residence within 60 days of the purchase, he said.

“If you falsify the occupancy status on your mortgage application you could be subject to the lender demanding the entire mortgage balance be repaid immediately, fines and restitution to the lender for any losses that they incurred and potentially fines and prison time,” he said.

If someone buys a home that is not a primary home but that changes, they can refinance the mortgage once they occupy the house as their primary residence if there is a benefit to doing so at that time, Calicchio said.

Why are the interest rates different?

Simply put, it makes sense that homeowners, if they get into financial trouble, will be more likely to make their primary home their first priority. If someone has two homes and can only afford to pay one of the mortgages, they’re more likely to let the second home slide. This makes it a bigger risk for the mortgage company, so it will charge a higher interest rate.

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This story was originally published in September 2025.

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