@Aaron Cayabyab Your lender can probably tell you better than us why you don't qualify but I will venture a guess. $1.25 million seems like a fairly large price tag for a house hack. Even if you make very high income and have a high net worth any sane lender is going to pause at a number that high.
I've never been to Hawaii but if I were you I would drive every street looking for a distressed, unloved property. I would then try to locate the owner and do anything necessary to get them to sell to me preferably with owner financing.
@Aaron cayabyab - FHA Loans have loan limits. These limits vary based on location and property type. Last time I checked, the FHA loan limit was around 680k. At a 1.2M purchase price I don’t see this type of loan working for this particular deal.
Also, if you do end up going FHA on another multiplex, one thing to keep in mind is the FHA Self Sufficiency Rule. This rule is unique to 3 & 4 unit properties. In order for the subject property to qualify, 75% of the total market rent must exceed the total monthly payment. I closed on a triplex last year using an FHA loan and slowed down by this rule.
Looks good to me. Google says FHA loan limit is $1,265,000 for a quad over there.
Many lenders aren’t familiar with using an FHA on a multi-family property. Insist that it’s allowed and or look for another lender.
Also make sure that you’d be able to occupy one of the units within 60 days of closing.
Talk to another lender the large majority of them usually don’t do more than a duplex.
Hi Aaron, as others have said many agents and lenders aren't fully aware that FHA does 2 - 4 unit properties, and in turn they'll often shy away from working with someone who's looking to do that. I'd suggest to keep calling lenders until you find one who has worked with multifamily FHA before. You'll find that if leases are in place a portion of those rental amounts can be used to help you qualify.
Originally posted by @Aaron Cayabyab :
Hey guys, just wanted to get some feedback from you folks. Im currently in the process of getting prequalified. I'm prequalified for a single family but the lender and realtor is saying for now I am not qualified for a multi. Any reasoning to that? I meet all the requirements for an fha loan.
I am out here in Hawaii and found a 4 unit property for $1,250,000. 2 two story duplexes on one lot.
1st house Upstairs unit - 3 bed 1 bath $2500 rent Downstairs - 3 bed 1 bath $2500 2nd house Upstairs 2 bed 1 bath $2000 rent Downstairs 1 bed 1 bath $1100
I plan on occupying the 1 bed unit. Are there any "fha" calculators I can do on my own to find out if I could qualify for certain properties?
Any help is appreciated.
Not getting too deep into the numbers, your monthly p and I would be $6334 at 4.5% on a 30 year. Tack on another $885 for MI, then taxes and insurance and you're well over the self sufficiency rule.
Thank you all very much for your feedback and help. I tried to talk to my lender and explaining to him about it but I don't think he has done a quad before. So thank you @Ray Ebert for that I will be looking for a new lender who is familiar with that type of loan.
@Rod Khlief thank you for the info. I will be looking for a new lender. I love you podcast! Keep up the great work! Very inspiring!
@Stephanie Potter thank you for the break down. That helps a lot in trying to determine if this will be a good fit.
@Jose Garcia so the lender was saying he need to do 75% income of 3/4 of the property to be on the safe side. I thought it was just 75% of the whole property and I was even informed him I would be comfortable with paying the full amount of $1100 for the last u it just to get into the property. Looking for a new lender now so we'll see what happens there.
Thank you all!
@Aaron Cayabyab I dont think that it is you that doesnt qualify, but the property. If it is the one I am thinking about in Kalihi, its legally only 2 single family. Zoning wont permit for more than 2 due to land size. City records says it is 2 single family dwellings that is why there is only 2 electric meters instead of 4. This means that you would likely only be able to use 1 unit's rent as you will occupy the other, which means you might not have enough income to cover the mortgage requirements.