Non-occupant Co-borrower on 2-4 Unit?

Question

I've run into dead ends on this with lenders and dug through past threads...

I have a pool of buyers who would like to house hack 2-4 units & pay ≤5% or less down - but need buy with a co-borrower who will not occupy.  Are there any financing possibilities anyone is aware of?

Thank you!

Angel Ginnett · Answer

With these two loans we did 5% down conventional, non-occupant, co-borrower loans

Angel Ginnett · Answer

I am not a lender, from what I understand FHA used to allow this with their kiddie condo loans,  but lender told me about 2 years ago they changed it to require 25% down.  We've had luck getting around it in the following ways.  If the second unit does not have its own electric meter it should still work (worked for us,  we bought a home with attached apartment with our daughter who was a college student) also if the appraiser classifies the second unit as an accessory apartment or mother in law unit or casita instead of calling it a "duplex"   We're taking a gamble on a property right now where the underwriter said he believes the appraiser will be classify it as a single family with accessory unit (fingers crossed) this property is two separate homes with separate meters, so there's a chance appraiser will say the dreaded "duplex" and we wont qualify.  appraisal is pushed out to Nov 24, so a long wait for this one.  But I'll keep you posted.  This is a property we are buying with our college student son to live in and rent out other rooms to have free housing while in college.