Purchasing/househacking Multi-Families w/student loan debt

[Kristina Lugo]

I would love to hear your experience with house hacking multi unit properties w/student loan debt.

- what type of financing you pursued?

- downpayment & closing cost strategies

I’m in Chicago but open to hearing stories from any market. Thank you!

[Elise Marquette]

@Erica Larence-Penna is right- house hacking is probably the best way to go. If you do it on an FHA loan, they are more forgiving on the debt to income ratio as well. This is the ratio of your gross monthly income to your total monthly obligations (proposed mortgage expense, auto loans, student loans, credit cards, etc.)

As far as down payment and closing cost strategies go, I usually recommend against down payment assistance programs. Generally they are more restrictive on the debt to income ratio , which can really inhibit your buying power. A lot of times they also come with a higher interest rate and/or are not forgivable, so you have to pay them back if you go to refinance or sell the property. 

The FHA loan allows you to get into the property for 3.5% down and there's Conventional loans as well for 3% down. Another thing to look into may be to ask the seller to contribute towards closing costs. This is something that your realtor will handle during the negotiations and it depends on your market, but worth a shot. I've had clients offer over asking price for a property and then ask for more seller concessions. Usually if you offer, for example 5K over asking price, it's really only pennies on the dollar in terms increasing of your monthly payment and can help get you the property. At the end of the day, it's important to remember that your goal is getting the property, maybe not necessarily gouging the seller and getting a crazy good deal. I recommend getting a smaller slice of the pie rather than no pie at all.