Different types of lending available

11 Replies

Good evening BiggerPockets,

I am a newer Connecticut investor with one 3 family property. I am looking to buy my 2nd home in the next 6 months or so and was curious to different types of lending that I may not know about. Is there anything other than

FHA, 20% conventional loans, portfolio lenders, or seller financing? I am considering looking a hard money lender possibly as well. I've heard there are conventional loans that require less of a percentage but I don't know anything about them. I am doing more research but figured I might come across some answers here as well. It's not I can't but how can I right?!

Thank you for any and all help!

-Ben Lemieux

@Benjamin Lemieux Good morning, In my experience with conventional lending in CT, I have had to put 25% down to get a loan from the bank. I have spoken to some hard money lenders in the area, but the charge 12% and 2 points. I would rather save up money then do that. 

Let me know if you find any good low down options!

If your credit is good you may qualify for a HOMEREADY conventional loan with just 3% down. Although I would focus more on returns and cashflow, because the lower the downpayment the the higher your loan payments will be, which will cut into your cashflow.

@Manny Cirino My credit is pretty good. 750+. Thank you for letting me know, I am going to look into that loan ASAP. I'm pretty careful about the deals I buy. I was able to put down an FHA loan (when I owner occupied my first 3 family initially) and still managed to cashflow pretty well.

@Benjamin Lemieux

For conventional you will be required to put down at least 15% on a single family and 25% down on a multi-family. 

@Benjamin Lemieux there are plenty of great options. 

But depending on what loan you used for your 3 unit, it may limit you for the next one. Check with a local bank to see what you qualify for and what loan products are out there. 

The BRRRR strategy with hard/private money is always a solid route for low capital acquisitions.