I looked at a duplex and got approved for the loan through a lender. All seemed good until I asked why they want 25% down. After he explained that it was a rental, I commented that I wanted to live in one unit and was looking for a lot less down than 25. He informed me that it wouldn't fly because I have two other rental properties. Is he correct? I thought the idea behind house hacking is to live in one unit to get low down payments.
If it's your primary residence, that should qualify for owned occupied, and you should only have to put 5% down. He probably thinks you're being subtle and obviously lying to try and get a better rate. I'd explain that you plan to move into the duplex, as your primary residence and you're owner occupying it.
Sounds to me like the banker is not experienced in “creative financing” I’d say look for a better lender. But I think most are going to need 25% down. But if u do not want to put 25% down. Think about maybe putting one of your other rentals as collateral bringing the down payment to 0 or very little less. Depending on how much equity you have or the property has appreciated since u got it.
@Linda D. Thanks for the information. That may be the case - I'll see if he misunderstood.
@Mateo Carrera Thanks a lot. I may try the collateral idea. I didn't think about that, I should have enough that way. Thank you for the idea.
no problem glad I could help. Also shop around. Go to small local banks. Credit unions. They are way more flexible with their requirements because usually they don’t sell your loan. They hold it for the term. W that said. Most likely u will get a 5 year loan amortized at 15-20 year.