Would I qualify for a Multi-Family House Purchase? (Lots of numbers included)

3 Replies

Hypothetical Situation:

Between myself and my girlfriend (who are looking to buy a multi) we make about $60,000/yr before taxes. The rental income for the area we're looking at is around $950/unit. We could do a MassHousing loan in Massachusetts, or an FHA loan. Each has its benefits. MassHousing, I don't have to pay mortgage insurance, but with FHA I can use 85% of the market rent to qualify instead of the 50% of market rent from MassHousing.

THE NUMBERS

$60,000/yr Gross Income (Combined)

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$950 * 2 Units * 12 Months * 50% = $11,400/yr (MassHousing)

$60,000 + $11,400 = $71,400/yr (Assuming 50% can be used)

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$950 * 2 Units * 12 Months * 85%= $19,380 (FHA)

$60,000 + $19,380 = $79,380/yr (Assuming 85% can be used)

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We are both completely free and clear of any student debt, and/or credit card debt. The only debt we have between the two of us is a car payment that I make for $279/mo. My credit score is higher than hers by about 100 points (Lets call it 750 and 650) though due to something that was on her credit for about 4 years without her ever knowing about it.

Would that poorly affect our qualification to purchase? And with these numbers, what kind of price point should I be looking at. I'm 21 and she's 26. Yes, I'm starting early and with great intention.

End long post.

@Christopher Johanson   First I wanted to say I'm jealous that your buying your going to buy your first property at 21. I was 24 myself. 

The quick answer to this is to go and get a pre approval. Its free and you can do it at your local bank (convenient). They will be able to tell you everything you need. 

It looks like your debt to income ratio is low, no student loan debt and only one car loan is good.   Solid income so I bet you would be able to get a Owner Occupied loan for a decent amount. 

It appears you would qualify for any county as you are under their income limit see this link.  https://www.masshousing.com/portal/server.pt?tbb=i...

I applied for a Masshousing loan through Naveo credit union unfortunately my income was too higher after factoring in the rents, their VP of lending is pretty knowledgeable and responsive.  His name is Albert Pinho, you might want to check them out.

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