FHA Loan For SF or MF?

2 Replies

I am interested in purchasing a multi family using a 3.5% DP FHA loan and living in one of the units. However, I was wondering if it's better to use the same loan for a single family house instead. I did notice that the FHA MIP adds up quickly on the monthly payment.

Looking forward to the feedback.

Thanks,

Hey @Duke M., I think it depends on your goals.  If you are ok with getting into a multi-family for a very low down payment but having no cash flow, I think that would be a great option.  However, a single-family home might cash flow a little better but I would run the numbers on both.  In my opinion, getting into a multi-family will be much better in the long-term than a single-family home.  

Thanks @Brad Hammond for your advice.

I'm 23 and live and work in the metropolitan NJ-NYC area. I would like to purchase a MF in this area. However, with the current market, it's been difficult to find a MF or SF with numbers that break even never mind produce a positive cash flow. Especially with a FHA 3.5% down payment plus the upfront and monthly MIP.

By year end, I should be able to put down 20%. Would prefer not to use all of my cash on a DP if possible so I can maintain cash reserves. That’s where I am struggling strategically.