Texas Fourplex Loans

5 Replies

Hello

I am curious if loans for fourplexes are different than other multifamily loans in Texas. I overheard a realtor once -a year or so ago- saying something like they have stricter guidelines. Does anyone have any knowledge of this?

single family homes and 2-4 unit properties are underwritten the same. Anything more than 4 is commercial i believe.

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Originally posted by @Ana Jolie :
Hello

I am curious if loans for fourplexes are different than other multifamily loans in Texas. I overheard a realtor once -a year or so ago- saying something like they have stricter guidelines. Does anyone have any knowledge of this?

HI Ana,

1-4 units is considered residential financing and is qualified at similar to a primary residence or secondary home.

The differences are:

higher down payments 3-4 unit properties its 25% min down payment and 20% on duplexes/2units for conventional financing

you'll need a min 6 months reserves for the subject property you're purchasing and 2 months on each additional financed property till you reach #5 fin prop.

Income wise you can use gross rents * 75% - the entire mortgage payment to help you qualify for the property in question, in essence you can use the gross rents on the subject property to help you qualify so you won't need as much of your own personal income if you buy correctly

FHA can purchase a 1-4 unit with as low as 3.5% down payment if you live in one of the units as your primary residence for a min of 1 year

If you have other questions feel free to fire them away.

thank you all for your replies

I would call around to local banks and credit unions, and see if any of them are willing to offer more relaxed standards than others. You may be able to find a CU that is still willing to take a deal with a smaller downpayment.

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