When you claim income and expenses from a rental property, you must list the specific property address on your tax form which is being rented. You also must claim depreciation on the property as part of your rental expenses, and that depreciation is based on the purchase price of the property being rented. So you could not claim rental income and expenses from one property, when they really relate to a totally different property.
There are also many factors that come in to play once you sell a property that was used as a rental. You must recapture the depreciation you claimed through the years on that property, and the property is not subject to any special exclusions from tax as is the case with the sale of a primary residence. So if you now report your real home as rental property, when you go to sell that home it will be subject to full capital gains tax with no exclusion allowed.
This is just simply not something you could do legally, and even if you would decide to try reporting one property as a rental, when in reality it was a different property, your chances of getting caught at this would be extremely high. The IRS is vigorously pursuing people who attempt to claim this credit who are not really entitled to claim it, and they have already prosecuted numerous individuals for tax fraud because of false credit claims.
Not only would you face the distinct possibility of having to pay back this credit if you were caught, but the interest and penalties that would be attached could easily double the amount of what you would be required to re-pay. Not to mention the possibility of facing criminal charges. In my opinion, it would just not be worth the risk you would be taking here.
If you are really determined to apply for this credit, then you should consider actually renting out the home where you now live and moving in to the condo for 3 years. That way you would be in complete compliance with the law and not have any worries.
Thank you supadhya