SAFE MLO Loan Inquiry & Application question: URLA declarations

SAFE MLOLoan Inquiry & Application

On the URLA declarations section, a borrower answers 'yes' to 'Will you occupy the property as your primary residence?' but plans to rent it out. What is the problem?

A It only affects the interest rate, so it is minor
B Nothing, because occupancy is only checked at closing
C It is an occupancy misrepresentation on a federal form
D It is permitted if the lease starts after 30 days

Show the answer and explanation

Answer: C. It is an occupancy misrepresentation on a federal form

The URLA declarations ask about occupancy intent, and borrowers certify the information is true. Knowingly stating owner-occupancy for an investment property is occupancy fraud, and false statements to influence a lender can be federal crimes (18 U.S.C. 1014; URLA acknowledgments and agreements). Occupancy changes eligibility and pricing, so it is material. Source: Fannie Mae Form 1003 / Freddie Mac Form 65 (Uniform Residential Loan Application), redesigned version mandatory Mar 1, 2021; 18 U.S.C. 1014 (as at 11 Oct 2026).

Common mistake

Treating occupancy as a minor pricing detail.

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Original study material mapped to the public NMLS Content Outline; not a real test question.Not affiliated with or endorsed by NMLS, CSBS or SRR. Verify figures and rules against current guidance before relying on them.