3-4 plex lenders in Western New York (Buffalo)

Upstate New York, New York
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3-4 plex lenders in Western New York (Buffalo)

Jamil Barton
Member since 2020 · 5 posts · 1 vote

I'm in the Buffalo, NY area and interested in a tri- or quad-plex which I will purchase as a owner-occupied home. I'm looking to identify a lender that will finance for less than 20% down payment. 


My current home (three unit property; a duplex with carriage home) was purchased in 2020 with Hunt Mortgage, who financed with less than 20% down payment. They now require a 25% down payment for properties over two-units. 


Wondering if anyone has identified local lenders accepting less than 20% down payment for 3-4 plex properties that will be owner occupied.

Thanks in advance!

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Erik EstradaBusiness Member
Lender · Member since 2022 · 6k+ posts · 1k+ votes
3y
Quote from @Jamil Barton:

I'm in the Buffalo, NY area and interested in a tri- or quad-plex which I will purchase as a owner-occupied home. I'm looking to identify a lender that will finance for less than 20% down payment. 


My current home (three unit property; a duplex with carriage home) was purchased in 2020 with Hunt Mortgage, who financed with less than 20% down payment. They now require a 25% down payment for properties over two-units. 


Wondering if anyone has identified local lenders accepting less than 20% down payment for 3-4 plex properties that will be owner occupied.

Thanks in advance!


You can buy with 3.5% down with an FHA loan. There is a self sufficiency test as others noted. If you do not need the rents to personally qualify for the loan, you may use all 4 units to pass this test.

Also make sure there isn't any deferred maintenance or heavy repairs needed on the property. FHA appraisals are very strict

[email protected]818-269-7983
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  • Devin PetersonBusiness Member
    Lender · Sarasota, FL · Member since 2022 · 2k+ posts · 667 votes
    3y
    Quote from @Jamil Barton:

    I'm in the Buffalo, NY area and interested in a tri- or quad-plex which I will purchase as a owner-occupied home. I'm looking to identify a lender that will finance for less than 20% down payment. 


    My current home (three unit property; a duplex with carriage home) was purchased in 2020 with Hunt Mortgage, who financed with less than 20% down payment. They now require a 25% down payment for properties over two-units. 


    Wondering if anyone has identified local lenders accepting less than 20% down payment for 3-4 plex properties that will be owner occupied.

    Thanks in advance!


    Hi Jamil, it would be tough to find what you're looking for in this current market. Some lenders cap at 85ltv even for SFH - you would have to get creative and utilize FHA. However, beware the self sufficiency rule. 75% of net rents must cover PITI. It's kind of like the DSCR rule but a lot harsher. If you can get away with 10-15% down payment - and can charge market rent or better, this would be my recommendation. Other than that, 20% is lowest I'm aware of.

    [email protected]860-538-3672
    ProAlpha Capital56 Reviews
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  • Devin Kelley
    Member since 2020 · 2 posts · 1 vote
    3y

    If you look at a property thats a value add and utilize a construction-type loan you could get there in a round-about way.

    Bank of Holland for example will finance 80% of the purchase and 100% (with construction draws) of repairs for MFH assuming you meet the DSCR ratio and LTV metrics. So you are still putting down 20% on the initial purchase but once you have finished repairs it's a much smaller amount percentage left in the deal when factoring in the ARV. You could of course do this through a hard-money lender but I have found it to be much easier working with one institution when starting out as their appraisals seem more favorable.

    1Reply
  • Dave Skow
    Lender · Seattle, WA · Member since 2014 · 2k+ posts · 899 votes
    3y

    @Jamil Barton- thanks for the question - lenders should be able to provide a FHA loan that will allow a 3-4 plex purchase with less than 20% down ...there will be a " self sufficency " test that many times makes this not work ( rental income covering the full payment ) ...good luck

    1Reply
  • Erik EstradaBusiness Member
    Lender · Member since 2022 · 6k+ posts · 1k+ votes
    3y
    Quote from @Jamil Barton:

    I'm in the Buffalo, NY area and interested in a tri- or quad-plex which I will purchase as a owner-occupied home. I'm looking to identify a lender that will finance for less than 20% down payment. 


    My current home (three unit property; a duplex with carriage home) was purchased in 2020 with Hunt Mortgage, who financed with less than 20% down payment. They now require a 25% down payment for properties over two-units. 


    Wondering if anyone has identified local lenders accepting less than 20% down payment for 3-4 plex properties that will be owner occupied.

    Thanks in advance!


    You can buy with 3.5% down with an FHA loan. There is a self sufficiency test as others noted. If you do not need the rents to personally qualify for the loan, you may use all 4 units to pass this test.

    Also make sure there isn't any deferred maintenance or heavy repairs needed on the property. FHA appraisals are very strict

    [email protected]818-269-7983
    LuxePrivate Investments LLC 572 Reviews
    WebsiteView Page
    1Reply
  • Jamil Barton
    OP
    Member since 2020 · 5 posts · 1 vote
    3y

    Thank you all - these are all great, and very helpful replies. Cheers!

    0Reply
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