Hey Bigger Pocket People, I am Swaroop. I live in Eagan Minnesota.
I am looking for my first rental property. I want to house-hack and look to get an FHA loan, . I have a family of 7. I am fairly new to this, but I understand the concepts. I am battling within myself, because even though I feel I understand the concepts, I have no clue where to start. I'm not sure whether I should work on my credit first or what.
Please guide me to chose the Condos or Townhomes under 200K with in the suburb areas of Plymoth,Eden Prairie, Edina, Eagan. in Minnesota State.
Hmm, I don't know the ins and outs of Eagan - but you need to.
What areas are up and coming?
Which areas are safe enough for your family?
Which areas has a pocket of affordability?
Create a Venn diagram on a map and find your sweet spot.
Spend some time checking your gut impression, then check with others.
Trust your own instincts first.
Best to you
First place I would start is with your banker to see if you have the income and credit to qualify. Housing a family of 7 on that budget is going to be tough in Plymouth and Eden Prairie, impossible in Edina, and I am not sure about Eagan....
If you are looking at condos and townhomes it may be worth looking into whether they have rules on how many people can live in a single unit. Also, not sure how you define family but many cities have rules limiting the amount of unrelated people living in a single residence. This may be an issue if your family includes friends.
@Swaroop Chowdary devineni First step is to speak with a lender, find out your current situation. You are going to need a big place and generally, a house hack assumes that you are going to rent out part of the space. Either you will rent out rooms in the unit you live in or you will rent out a separate unit such as the other side of a duplex. @John Woodrich makes some good points about affordability. How many of the 7 in the family make incomes? There are loan programs that would allow you to potentially use that income toward the loan but it's not possible to determine your ability to purchase without the detail that an official loan application brings.
Also, don't worry about your credit until you meet with a banker and find out if your current credit will not work. Any good lender can help you determine what your next step will be. You should be able to get a 3.5% down FHA loan if you have a middle credit score of 600 or above. One issue will be if you are buying a townhome or condo in those areas, most are legally structured as condo's and FHA has restrictions on condos will limit the developments you can purchase into the ones they have already approved. See FHA's list here https://entp.hud.gov/idapp/html/condlook.cfm