Investor · West Chicago, IL · Member since 2009 · 22 posts · 1 vote
I am about to put in a couple offers on some short sale 3-flat buildings. I am working it as an "owner occupied" loan even though that is not going to be the actual case. I would've preferred to put down about 10-15% but my banker says that even if they do grant me this a an owner occupied loan, since it is a 3-flat you have to put down 20% no matter what. If it was a SFH it would be different but in this case 20% is the minimum. I live in the Chicagoland area and am working with Chase. I am just curious if others have heard of this 20% minimum down on a 3-flat rule? Thanks..Joe
Real Estate Broker · Rochester Hills, MI · Member since 2009 · 2k+ posts · 2k+ votes
17y
3 family means it will follow investment guidelines and yes 20% is about as good as it gets - a lot of lenders are at 25% down so that sounds like a decent deal in todays market.
It looks like your question was a long time ago now, but I'm new to the site....
I am interested in a similar purchase in Calif and am looking at an FHA loan with 3.5 % down ..... after reading the fine print, FHA will cover up to a four-plex (owner-occupied) out her in Cali anyway....
Hope you got what you wanted last year ! Good luck!
Developer · Garland, TX · Member since 2008 · 8k+ posts · 4k+ votes
15y
gettinbackin, you are correct that you can finance up to a 4 unit with FHA if you are going to use it as your primary residence. However, what the OP is proposing; getting the OO FHA financing and not occupying it, is fraud.
Yes Jon, so true. I have two questions to tag along in here, hope you don't mind Joe....
*** Can you use (part of) the rental income to qualify for the FHA loan ratios?
*** Is the 29% front end ratio PITI or just PI