Mortgages for Duplex's that are investment properties

Milwaukee, Wisconsin
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Mortgages for Duplex's that are investment properties

Elijah Goodman
Insurance Agent · Pewaukee · Member since 2020 · 2 posts · 3 votes

Hi Everyone, 

I currently own a Duplex in Wauwatosa. This was done with an FHA loan in 2020. I refinanced out of that in 2021 thanks to the market going up so much. Which made me eligible to do another FHA loan which I am using to close on a duplex in Shorewood at the end of this month.

I know that I am not eligible for any more low down payment loans as I will have an active FHA loan. I am looking to buy another duplex on the East side of Milwaukee, Wauwatosa, or West Allis. Every lender I have spoke to so far is telling me I will need to put down 25% as it is a duplex not a single family investment property.


I am just wondering if anyone else has any suggestions or if it is possible to put down only 15-20% on a duplex investment property?

Please let me know! I would appreciate any insight.

Thank you 

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Rebecca KnoxBusiness Member
Specialist · Milwaukee, WI · Member since 2014 · 1k+ posts · 1k+ votes
4y

You could try Educator's CU, Scott Heine (lends based on asset (property value and/or rental income) rather than personal income, 10-YR Balloon, 80% LTV) or Covantage Credit Union, Dan Gast (The deals need to stand on their own and cheapest loans are written using tax assessment for value minus 20% of your money into the deal.)

Also, Timothy Hero (Up to 80% LTV for cash-out and 80% for purchase.)





Educator'S Credit UnionScott Heine
Covantage Credit UnionDan Gast
Captain Save-A-Home LLC
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  • Alfonso J.
    Lender · Miami, FL · Member since 2022 · 70 posts · 19 votes
    4y

    Hey @Elijah Goodman,

    You can easily get an investment loan for 20% down!

    Do you currently have this Property under contract?

    0Reply
  • Jeff LamothePro Member
    Member since 2019 · 91 posts · 66 votes
    4y

    That is a great question @Elijah Goodman.   I also had to put down 25% for a conventional loan on a duplex and would be happy to work with lenders that require less than that. 

    @Alfonso J.is your company offering 20% conventional loans on small multi-families?    The only time I heard that 20% down is required is for a hard money loan.  

    0Reply
  • Cody Branham
    Member since 2020 · 7 posts · 3 votes
    4y

    Hey Elijah,

    I am currently working a deal on two duplex's and have been calling a lot of different lenders for quotes. I have ran into a few that will do 20% down, but then either their APR or the points you have to put down are quite a bit higher. I locked down a conventional with Navy Federal (if you're eligible) at 25% down but no points or PMI on the mortgage. That extra 5% down will be worth it in the long run on this deal.

    You may run into something similar. 

    0Reply
  • Marcus Auerbach
    Investor · Milwaukee - Mequon, WI · Member since 2010 · 5k+ posts · 7k+ votes
    4y

    Congrtulations on the Shorewood duplex and getting an AO with an FHA loan - not an easy task! I think I know which one, because I'm involved on the other two ;-)

    Investment properties (non owner occupied NOO) require more down payment, because you are more likely to default on an investment, than on your primary residence, where you go to sleep every night.

    For an OO you can do 5% down conventional, some lenders offer a no PMI product if you have good credit (PMI for life is one of the big downsides of FHA).

    1Reply
  • Matthew CrivelliBusiness Member
    Lender · MA · Member since 2021 · 1k+ posts · 1k+ votes
    4y

    You need to look into DSRC loans. They will only require 20% with good credit but you will need to show reserves and the rates are high. Trade off's 

    [email protected]413-348-8346
    Freedom Capital Funding, LLC523 Reviews
    WebsiteView Page
    0Reply
  • Rebecca KnoxBusiness Member
    Specialist · Milwaukee, WI · Member since 2014 · 1k+ posts · 1k+ votes
    4y

    You could try Educator's CU, Scott Heine (lends based on asset (property value and/or rental income) rather than personal income, 10-YR Balloon, 80% LTV) or Covantage Credit Union, Dan Gast (The deals need to stand on their own and cheapest loans are written using tax assessment for value minus 20% of your money into the deal.)

    Also, Timothy Hero (Up to 80% LTV for cash-out and 80% for purchase.)





    Educator'S Credit UnionScott Heine
    Covantage Credit UnionDan Gast
    Captain Save-A-Home LLC
    WebsiteView Page
    1Reply
  • Alfonso J.
    Lender · Miami, FL · Member since 2022 · 70 posts · 19 votes
    4y

    Good Morning @Elijah Goodman

    Yes! PM me for more details.

    0Reply
  • Alfonso J.
    Lender · Miami, FL · Member since 2022 · 70 posts · 19 votes
    4y

    Which state is the property located in ?

    0Reply
  • Kevin Romines
    Lender · Winlock, WA · Member since 2013 · 1k+ posts · 1k+ votes
    4y

    There are down payments at 15% & 20% on Non-QM loan products. The rate will be higher than a Conventional loan, but you won't have mortgage insurance on the 15% down product that you would on the conventional loans. Besides, you buy it with this loan and plan to refinance it to conventional as soon as you have the equity. You do this for the best rates available at that time.

    Also the reserve requirements on Non-QM loans can be more than what is required on Conventional loans. Pick your poison!!!

    I hope this helps?

    0Reply
  • Stephanie P.Pro Member
    Washington, DC Mortgage Lender/Broker · Member since 2016 · 4k+ posts · 2k+ votes
    4y
    Quote from @Elijah Goodman:

    Hi Everyone, 

    I currently own a Duplex in Wauwatosa. This was done with an FHA loan in 2020. I refinanced out of that in 2021 thanks to the market going up so much. Which made me eligible to do another FHA loan which I am using to close on a duplex in Shorewood at the end of this month.

    I know that I am not eligible for any more low down payment loans as I will have an active FHA loan. I am looking to buy another duplex on the East side of Milwaukee, Wauwatosa, or West Allis. Every lender I have spoke to so far is telling me I will need to put down 25% as it is a duplex not a single family investment property.

    I am just wondering if anyone else has any suggestions or if it is possible to put down only 15-20% on a duplex investment property?

    Please let me know! I would appreciate any insight.

    Thank you 

    As others have said, DSCR is a good way to go. Rates are very solid at 80% and below. No income verification. The rents are used to offset the mortgage. You can close in an LLC or personal. 6 months reserves are the usual requirement although there are some products that don't require reserves. Expect a prepayment penalty, but if you want to keep the property, use it to your advantage. The longer prepays affect the rate in a positive way.

    0Reply
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