Down payment for Homestyle rehab loan house hack?

6 Replies

I'm about to close on my first deal on a 3 unit in Chicago FHA financing and am looking for lending options for my next deal. The Homestyle loan seems like a good choice as I'd like to find a deal, rehab the property and live in it.

My main question is, what dictates the down payment amount? I've seen mixed reports of anywhere between 5% down and 35%. Can anyone help clear up how I can determine where in this range I would fall? This would be my second deal that I would purchase sometime next year after I've lived in my new FHA financed property for the minimum amount of time. And I'd like to purchase another 2-4 unit property with the Homestyle loan. Any help is appreciated. Thanks!

Hey Byron, Homestyle requires 15% down on a 2unit and 25% down on a 3-4. As a top rehab lender in the country, I can confirm that is exactly what is required. 5% on Homestyle is only allowed if it's a single family, townhome, or condo.

All of the above is for a primary residence, and the percentages noted are against the total of acquisition plus rehab costs put together. Any other questions, feel free to email.

Originally posted by @Byron W. :

I'm about to close on my first deal on a 3 unit in Chicago FHA financing and am looking for lending options for my next deal. The Homestyle loan seems like a good choice as I'd like to find a deal, rehab the property and live in it.

My main question is, what dictates the down payment amount? I've seen mixed reports of anywhere between 5% down and 35%. Can anyone help clear up how I can determine where in this range I would fall? This would be my second deal that I would purchase sometime next year after I've lived in my new FHA financed property for the minimum amount of time. And I'd like to purchase another 2-4 unit property with the Homestyle loan. Any help is appreciated. Thanks!

 Hey Byron.  Fellow investor here in the city of Chicago.  Michael's answer is spot on.  What area is your unit in and what areas are you going to be looking at going forward?  

Originally posted by @Jeff Burdick :
Originally posted by @Byron W.:

I'm about to close on my first deal on a 3 unit in Chicago FHA financing and am looking for lending options for my next deal. The Homestyle loan seems like a good choice as I'd like to find a deal, rehab the property and live in it.

My main question is, what dictates the down payment amount? I've seen mixed reports of anywhere between 5% down and 35%. Can anyone help clear up how I can determine where in this range I would fall? This would be my second deal that I would purchase sometime next year after I've lived in my new FHA financed property for the minimum amount of time. And I'd like to purchase another 2-4 unit property with the Homestyle loan. Any help is appreciated. Thanks!

 Hey Byron.  Fellow investor here in the city of Chicago.  Michael's answer is spot on.  What area is your unit in and what areas are you going to be looking at going forward?  

 Thanks Mike!

Jeff, the building is located in Bronzeville. I'm keeping my options open since I have a year to decide where the next property well be that I purchase. Bronzeville and a few other neighborhoods seems like a good investment right now. But my ultimate goal is cash flow so whether I decide to invest out of state or in a Chicago neighborhood that has good cash flow, I'm keeping my options open and monitoring the market for the next 200 or so days before I refi out of my FHA and look to make my next purchase.

Originally posted by @Byron W. :
Originally posted by @Jeff Burdick:
Originally posted by @Byron W.:

I'm about to close on my first deal on a 3 unit in Chicago FHA financing and am looking for lending options for my next deal. The Homestyle loan seems like a good choice as I'd like to find a deal, rehab the property and live in it.

My main question is, what dictates the down payment amount? I've seen mixed reports of anywhere between 5% down and 35%. Can anyone help clear up how I can determine where in this range I would fall? This would be my second deal that I would purchase sometime next year after I've lived in my new FHA financed property for the minimum amount of time. And I'd like to purchase another 2-4 unit property with the Homestyle loan. Any help is appreciated. Thanks!

 Hey Byron.  Fellow investor here in the city of Chicago.  Michael's answer is spot on.  What area is your unit in and what areas are you going to be looking at going forward?  

 Thanks Mike!

Jeff, the building is located in Bronzeville. I'm keeping my options open since I have a year to decide where the next property well be that I purchase. Bronzeville and a few other neighborhoods seems like a good investment right now. But my ultimate goal is cash flow so whether I decide to invest out of state or in a Chicago neighborhood that has good cash flow, I'm keeping my options open and monitoring the market for the next 200 or so days before I refi out of my FHA and look to make my next purchase.

 That's great.  Congrats on your success.  I've spent a ton of time researching the various neighborhoods of the city, particularly the north side.  PM me if you'd like to discuss further.  

Originally posted by @Byron W. :

I'm about to close on my first deal on a 3 unit in Chicago FHA financing and am looking for lending options for my next deal. The Homestyle loan seems like a good choice as I'd like to find a deal, rehab the property and live in it.

My main question is, what dictates the down payment amount? I've seen mixed reports of anywhere between 5% down and 35%. Can anyone help clear up how I can determine where in this range I would fall? This would be my second deal that I would purchase sometime next year after I've lived in my new FHA financed property for the minimum amount of time. And I'd like to purchase another 2-4 unit property with the Homestyle loan. Any help is appreciated. Thanks!

 The homestyle reno loan with low money down is only for single unit.  Why not do the 5% down non-renovation loan on the bronzeville one now and do the 203k on the second?

Originally posted by @Brie Schmidt :
Originally posted by @Byron W.:

I'm about to close on my first deal on a 3 unit in Chicago FHA financing and am looking for lending options for my next deal. The Homestyle loan seems like a good choice as I'd like to find a deal, rehab the property and live in it.

My main question is, what dictates the down payment amount? I've seen mixed reports of anywhere between 5% down and 35%. Can anyone help clear up how I can determine where in this range I would fall? This would be my second deal that I would purchase sometime next year after I've lived in my new FHA financed property for the minimum amount of time. And I'd like to purchase another 2-4 unit property with the Homestyle loan. Any help is appreciated. Thanks!

 The homestyle reno loan with low money down is only for single unit.  Why not do the 5% down non-renovation loan on the bronzeville one now and do the 203k on the second?

Hey Brie! Using the 5% down was my original plan but that would've required 2 more months of saving before I could buy. I'm about 4 weeks from my closing date but I do wish I would've been a bit more patient and gone that route. I was mainly concerned with the lack of 3 unit properties being sold in the area and people offering over listing. The place I found I got a fairly nice discount on.