Financing Questions on an Atypical Duplex

2 Replies

I'm under contract for $340k on a piece of property that has two separate houses and an unattached garage. The houses are both rented up with a total gross rent of $2500 per month. I reached out to my mortgage broker who has done my last couple of SFR, and he is telling me that I need to put 25% down if it is a true duplex. This raises a couple of questions:

How do I determine if it is a "true duplex"? I looked it up on the county site and it lists both dwellings as residential. In talking to the owner, the buildings are both legal and are grandfathered into the zoning type.

Do I indeed have to put 25% down on a true duplex?

Is it possible to use the rents as a case for a lower percentage down? 

Thanks! 

@Sam Rust You can confirm with the city as to the proper status of the duplex. Make sure to get copies of all important documents and other statements. 

Average down payment varies between 20-25% in our market for investment properties. Each market and each lender is different. Your relationship with a lender also comes into play. From my understanding, with residential properties it is not as easy to use the rents as a case for lower percentage down (residential properties are valued off comparables and not income). 

Your best bet would be to check with multiple lenders especially those that work with investors. In the past, I have gotten referrals from investor-focused realtors and mortgage brokers. 

25% down payment  is required for 2-4 units under conventional loan. 

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