Warehouse Manager · Macungie, PA · Member since 2015 · 30 posts · 0 votes
Hey everyone,
Thanks again in advance for the feedback. I am curious if I can buy a multi-family property with an FHA loan through my LLC?
I am already a home-owner and purchased my first home with an FHA loan. Starting off my business I wanted to protect my assets so I formed an LLC to buy my properties through. There is a property I'm interested in that will provide me with significant cash flow but don't have the entire capital needed for a conventional loan.
If anyone has any experience with this, please let me know how it worked out for you. Thank you!
@Franco Urbaez You can buy a triplex with an FHA loan so long as you occupy one of the units. You cannot purchase it with your LLC, as Conventional, FHA, VA or any loan that is sold to Fannie and Freddie will not allow this. I believe you can only have one FHA loan at a time, so if your first loan was an FHA loan, you will have to refi to conventional or buy your next property as a conventional loan. If you intend to occupy the property, you can still do a conventional with 5% down, although I believe they are now offering conventional loans at 3.5% down so long as you fit in the box, credit score, DTI etc... So there are options other than FHA that allow you low down payment purchase capability. But you must occupy the property. Hope this helps
not sure I agree you only one one prop under FHA but no you can't buy in the name of the LLCs. Buy it in your name, make your payments for 6 months and then transfer prop into LLCs. Word of caution, banks can call the loan if they know you transferred the prop to an LLCs
@Franco Urbaez You can buy a triplex with an FHA loan so long as you occupy one of the units. You cannot purchase it with your LLC, as Conventional, FHA, VA or any loan that is sold to Fannie and Freddie will not allow this. I believe you can only have one FHA loan at a time, so if your first loan was an FHA loan, you will have to refi to conventional or buy your next property as a conventional loan. If you intend to occupy the property, you can still do a conventional with 5% down, although I believe they are now offering conventional loans at 3.5% down so long as you fit in the box, credit score, DTI etc... So there are options other than FHA that allow you low down payment purchase capability. But you must occupy the property. Hope this helps
I was told the other day by someone at Quicken loans, that FHA does not do any thing but single and duplex loans anymore. I found this news quite disconcerting, so I can't verify it's accuracy, but take it at face value.....
Unless it's changed in the last few years, you can have more than one FHA loan but your reason for buying a new house has to be something along the lines of having a child and the house not being large enough. Or being transferred to a new location or having to move out of area to get a new job. It cannot be used to acquire an investment property but you can retain the FHA loan on your first property and acquire a second property via FHA if the reason for needing a new loan is a (if I remember correctly) "life changing event" as mentioned above. Realistically it has to make sense to the FHA underwriter. Could be grandma needs a place to live etc, etc.
Thanks everybody! That was very quick and helpful! I really appreciate it! :)
Hey Franco! Although I have seen many ask questions about this, I have been struggling to find anyone who has detailed their experience with this. I have a similar plan to the one you described in this thread. Can you talk about the experience of trying to get an FHA through an LLC?