This may seem like an odd question, but I am experienced with commercial lending, but have never purchased a SFH as an investment property. I have a question about financing a SFH. I am planning to purchase a SFH that is adjacent to one of my other properties. Problem: All my reserves are already earmarked for other activities so I do not want to pay cash. I while back, I talked to someone who invests in SFHs and he mentioned a method that I thought was through the FHA where you can purchase up to 10 investment properties at low interest rates, long terms and no prepayment penalties. I researched FHA loans and it appears they only offer loans to owner-occupied properties. Can some help me understand what this person was talking about?
@Blaise P. You can only have 1 FHA loan at any given time. What your friend must be talking about is that Fannie/Freddie allow you to have 10 financed properties. If you hold the property in your own name, then you can buy them using Fannie/Freddie and/or FHA/USDA/VA. The option will depend on if you are going to owner occupy or its an investment. You will be able to get the 30 yr fixed rates.
Thank you Upen. How do the Fannie/Freddie loans work. If I put 30% down, can I have it amortized over 30 years? Do you know what the current interest rates are? Do the loans typically have a term? Prepayment penalty?
Thanks again for your help
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