Occupant

What It Means

An occupant is a Co-borrower or co-owner who intends to live in the property as their Primary Residence after closing. In most co-buying arrangements, at least one co-buyer is an occupant — and in many cases, all co-buyers intend to occupy the property together.

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Occupancy status is a key factor in mortgage underwriting. Lenders offer the most favorable loan terms — including lower Down Payment requirements and lower interest rates — when at least one borrower will occupy the property as a primary residence.

How Occupancy Affects Financing

Primary residence occupancy unlocks access to a broader range of loan programs, including FHA, VA, and conventional loans with down payments as low as 3%–3.5%. When all co-borrowers are occupants, the group typically receives the most favorable underwriting treatment available. When the group includes both occupants and Non-occupant co-borrowers, the lender evaluates the mixed occupancy profile, which may affect available programs and terms.

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Lenders typically require occupant borrowers to move into the property within 60 days of closing and maintain it as their primary residence for at least one year. Co-buyers should understand these requirements before closing and ensure each party's occupancy intent is accurately represented on the loan application.

Why It Matters for Co-owners

Occupant co-owners bear the day-to-day reality of living in the property — they are directly affected by maintenance decisions, neighbor issues, and property condition in ways that Non-occupant co-owners are not. This difference often creates tension around Shared Expenses: occupants may want improvements that non-occupants view as unnecessary, or non-occupants may resist paying for repairs that primarily benefit the occupants' living experience.

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The Co-ownership Agreement should define how occupancy status affects expense allocation, maintenance responsibilities, and decision authority. It should also establish provisions governing property use, guest policies, and what happens if an occupant co-owner moves out.

Key Points

• A co-borrower or co-owner who lives in the property as their primary residence
• Occupancy typically unlocks the most favorable mortgage terms, including lower down payments and interest rates
• Lenders typically require occupancy within 60 days and for at least one year
• Occupant co-owners are more directly affected by property condition and maintenance decisions
• Mixed occupancy groups should define expense allocation based on occupancy status
• The Co-ownership Agreement should address what happens if an occupant moves out