Real Estate Broker · Hyde Park Tampa, FL · Member since 2019 · 2k+ posts · 3k+ votes
For those investors who are looking to acquire and occupy a 2-4 unit MF property, it's going to be a lot easier to do so. Look at this:
"In a significant policy change, Fannie Mae has announced that, starting from the weekend after November 18, 2023, it will accept 5% down payments for owner-occupied 2-, 3-, and 4-unit homes. This marks a departure from the previous multifamily financing requirement of 15-25% down payments for duplexes, triplexes, and four-plexes." (Source: The Mortgage Report)
It's not limited to first time purchasers so you're good to go!
That's great! Quick follow-up: Is this only for owner-occupied? If so, how long do you have to live in the property before you can move out and repeat?
Glad to see someone bringing this to light here. My realtor sent me this same article yesterday and I was ~thrilled~ that I might be able to put low money down without going the FHA route.
I'm still waiting to pull the trigger on my first property, which will be a 2-4plex where I live in one unit and rent out the others, but my question is (for you or anyone else that may be in the know) is whether this is just for first-time homebuyers or in general? I know it has to be owner-occupied, but could I rinse and repeat the strategy over and over so long as I live in each property for at least a year?
Would love to get this all straight so I can start adjusting my strategy confidently!
It's not limited to first time purchasers so you're good to go!
That's great! Quick follow-up: Is this only for owner-occupied? If so, how long do you have to live in the property before you can move out and repeat?
Unless the lender stipulates differently in their documents (like VA financing that requires owner occupany for the duration of the mortgage), 'owner occupancy' requires that you move in within 60 days and retain it as your primary residence for 12 months. After 12 full months, the 'life happens' rule applies and you can rent it.
Unless the lender stipulates differently in their documents (like VA financing that requires owner occupany for the duration of the mortgage), 'owner occupancy' requires that you move in within 60 days and retain it as your primary residence for 12 months. After 12 full months, the 'life happens' rule applies and you can rent it.
@Patricia Steiner this is great for people like me as a first time investor. We live in CA. How does the lender verify that Me (or my husband) moves in and lives there? What if we own a home?
If you currently own a home and you don't plan on selling it or making it an investment property, this financing option wouldn't be available to you. The lender will qualify you (there's a rather 'red flags list' that is used) - as well as have you sign all the occupancy declarations - that pertain to the financing prior to closing. After closing is a post-verification process. Here's a link to the Fannie site that outlines the occupancy verification procedures:
And, keep this in mind: it's one thing to not meet the 12 month occupancy requirement - life happens. But if caught claiming occupancy when you will not is a pretty serious offense: "Occupancy fraud is akin to banking fraud, where the lender can demand the loan be paid in full. Those who commit occupancy fraud may also face fines, penalties, and even jail time." (End)
Hello Patricia. Thank you for a great and informational post. When trying to rinse and repeat after the 12 months are up on the firsts property, are there any distance requirements the 2nd property needs to be from the 1st when buying the second property using the 5% down after fulfilling the 12 month occupancy requirement on the first?