Purchase Triplex with Lower Down Payment as Owner Occupied?

Question

Okay- I am throwing this out to see if anyone or any lenders can provide some insight. I have a primary residence, but am looking to see if it is possible to purchase a triplex as an owner occupied residence with a lower down payment than the 20% required for typical loan.  My current primary residence is not an FHA loan, and I am looking to downsize into a triplex.  I'm a single empty nester and would like to know if this is at all possible or realistic?  I have 10-15% for a downpayment on a triplex I am looking at in California.  But not the 20% with the reserves required etc.  I would barely be making it.  Anyone with insights?

Stephanie P. · Answer

Most underwriters would question your motives.  Are you going from a large single family property to an apartment size dwelling and what's the crime like in the area you would be moving to vs. the crime statistics where you live right now.  The very least you'll have to do would be write a pretty detailed life letter explaining why you're trying to move into an apartment.  Shouldn't be too difficult, but will require an explanation.

Michael K Gallagher · Answer

Hey @Lisette S. you will for sure want to confirm what your options are with a lender in your market, but in general yes you should be able to get a triplex with an FHA loan and 3.5% down.  There may even be some other products that your lender will have that is considered conventional, but certainly there will be some options for you!  The big question would be if you are trying to keep your current residence and rent that out as well.  It could be possible but will depend entirely on your personal situation and DTI.