Need FHA advice.

5 Replies

I am looking to purchase a duplex to live in and rent out the other half. However, the seller actually has another identical duplex directly next to the one I am looking to move into. Would it be possible to obtain both duplexes on one FHA loan? Also, is it possible to obtain these properties w/ no money down? I would have enough for a down payment for one duplex but not both. Thank you.

@Bradley Heath

No, unfortunately, FHA doesn't allow one loan across two properties and they also only allow one FHA loan at a time. If you'd like to acquire the other property, you'll have to use something other than FHA.

Thank you. I figured that may be the case but figured I would check.

No, since they are on separate tax lots they wont let you buy both. I tried to do that as well. You can talk to the seller and see if they will do seller financing. Since you are buying the other one with FHA they will know that you are serious but short on cash.

Also with your FHA if you offer over what you were going to by the closing costs amount and ask the seller to pay closing costs that can save you money on the front end. Then see if you can close at the beginning of the month so you can collect that months rent at closing.

That's a good idea.  You will have to forgive me as I have never purchased a home before.  However, is it possible to have the seller take care of all the closing costs?  If so, would that mean all I need up front is the down payment?

@Bradley Heath

@Austin Youmans

Yes, the seller can contribute toward closing costs, but only up to 6% of the lesser of the appraised value or purchase price. 

If you can't get enough from the seller to cover your closing costs, see if taking a slightly higher interest rate from your lender can give you more rebate you can use toward closing costs. FHA financing often has a lot of margin built in and the lender can pass that on to you in the form of rebate that can be applied toward closing costs if you're willing to take a slightly higher rate. I did FHA loans all the time where the bank was paying all or most closing costs and the interest rate was still very good. That's a great way to keep your out of pocket expenses down.

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