I see frequent references here regarding housing hacking and the usage of FHA loans. It seems most people are doing so to allow rental income to support DTI ratios.
If I can income-qualify for purchasing a property without utilizing a FHA loan, is there any reason or need to do so? On the same token, will a traditional lender allow a duplex or 4-plex to be purchased with a normal fannie may or super conforming loan?
Rental Property Investor · Philadelphia, PA · Member since 2016 · 191 posts · 165 votes
9y
Be aware that home possible has borrower income limits depending on where the property is located. Some areas have no income limits, use the Freddie Mac tool to find out where:
http://www.freddiemac.com/homepossible/eligibility.html
Rental Property Investor · Albany, OR · Member since 2015 · 312 posts · 136 votes
9y
Most people like the FHA loan due to the low down payment requirement. If you can put more money down (like 20%) then you can get a traditional mortgage without PMI. There is also the Home Possible loan (which I just learned about here: https://www.biggerpockets.com/forums/61/topics/419...) available through Freddie Mac which you can get with 5% down and the PMI goes away once you reach 78% LTV, whereas FHA has PMI for the life of the loan.
Rental Property Investor · Philadelphia, PA · Member since 2016 · 191 posts · 165 votes
9y
Be aware that home possible has borrower income limits depending on where the property is located. Some areas have no income limits, use the Freddie Mac tool to find out where:
http://www.freddiemac.com/homepossible/eligibility.html
My lender is saying they have pre-approved a $540k loan with 30k down, which is just a bit above 5%. It is listed as a "super conforming" loan and has very competitive rates, including PMI auto-removal at a certain balance pay down or bank appraisal paid for by the borrower.
Is there any reason this won't work for an owner-occupied duplex?