House Hack 5% downpayment

[Chris Archer]

Hi everyone. My wife and I want to purchase a duplex with 5% down as a primary residence and live in one unit. We currently own a house we live in as our primary residence (which we would rent out) and another single family rental. I have been in contact with lenders and have been finding that the minimum downpayment for a 2 unit NON first time home buyer/owning other property is 15%. This cuts into my cash on cash return as opposed to only putting 5% down. I've looked at FHA, but the MI is high and stays with the property for the life of the loan putting me at a negative cash flow. Any ideas for a way to purchase with 5% down? Portfolio lenders? Thanks so much!

[Jeremy Taggart]

@Chris Archer We have a portfolio lender here in PIttsburgh that will let you go as low as 5% down for an OO 2-4 unit. They do a 30 year amortization but adjust the rate at 10 years. I actually just used this to buy a house hack duplex since I had already used my FHA loan. You are going to have to pay mortgage insurance if you are below 20% down regardless of what type of loan you use. But yes your standard Fannie Mae products 15% is the lowest I have ever heard of being able to put down on a duplex. The nice thing is you can get a 6% seller assist with the 15% down. Your other option is going 5% down on a single family that has maybe a garage or basement apartment that you could rent out. You could still buy it as a single family and then end up renting out that other living quarters.