I am looking to invest in my first multi-family property (3-4 units) through a Neighborhood Assistance Corporation of America (NACA) loan. One of the conditions with NACA is that you need to live in the property (which I plan to) for as long as you have the loan with them. If you want to move out without selling the property without breaking the terms of the contract, you need to either pay the rest of the loan or refinance and then you can move out.

What I would like to do is to buy the property early next year (in NJ) and live there for approx. 3-5 years. As we all know, interest rates are at record lows right now. I think we can expect interest rates to go up in the next 3-5 years (??). My question is, when I have to refinance to be able to move out and keep the property, would my interest rate inevitably go up? Which would make me lose the money that I am saving today by getting the loan through NACA. I.e. if I get the interest rate today for 3% in a $600,000 with a 30-year fixed mortgage and then refinancing time comes around and the interest rates are around 8%. Would my interest rate inevitably go up? If that is the case, would it be better to save a little more and get the property through a FHA loan instead?

Appreciate all the comments and help.

Thanks,

Sergio