An occupancy affidavit in a loan package states that:

Occupancy is one of the strongest determinants of loan pricing and terms. A primary residence carries lower rates and different underwriting than an investment property or a second home, because a borrower in financial difficulty is far more likely to keep paying on the house they live in. Lenders therefore require an affidavit in which the borrower states their intention regarding occupancy — typically that they will occupy the property as their principal residence and will do so within a stated period after closing. Because the statement is the basis for the terms granted, misrepresenting it is treated as a serious matter, potentially constituting loan fraud. For a signing agent the handling is narrow: present the document, do not explain what occupancy status the borrower should claim or what the consequences of each would be, and if the borrower says something inconsistent with the affidavit, stop and contact the contracting company rather than resolving it at the table.

The occupancy affidavit records the borrower's stated intention regarding occupancy, which underpins the loan's pricing and terms.

Occupancy status affects loan pricing and underwriting. Lenders require an occupancy affidavit stating the borrower's intention to occupy the property as represented, and misrepresentation may constitute loan fraud.

Occupancy Sets the Price. Primary residence terms exist because the borrower lives there.

If the borrower says anything inconsistent with the affidavit, stop and contact the contracting company. Do not resolve it at the table.

• •Explaining what occupancy status the borrower should select
• •Proceeding past a statement inconsistent with the affidavit
• •Confusing it with income or appraisal documentation