FHA Loans - Triplex/Quadplex

[Kyle M.]

I applied online to get pre-approved for an FHA loan on a triplex. I filled out a form through Quickenloans and the representative called me 30 seconds later. I was told that FHA loans work for duplex's, however they do not work on triplex's and above. She also told me that the minimum down-payment on these type of properties were 25%. I did not even get to the point were she asked for my social security number, income, nor did she check my credit.

So BiggerPockets, is this the norm or do various lenders handle these issues differently?

[David Beard]

Just remember when you're running FHA numbers with the 3.5% minimum down payment, that there is an upfront 1.75% PMI charge that can be baked into the loan, and there is an ongoing 1.25% PMI charge (1.25% per year of the original loan amount) that will be in your mortgage payment.

One nice thing about the FHA loan is that it will be assumable in the future for a new buyer, and the low rate you're locking in today could be a very strong selling point for the property down the road.

I'd benchmark your new lender's rate against amerisave.com.