Hello everyone- long time reader/listener to BP, first time poster. I am looking to house hack somewhere on the north side of Chicago and wanted to get some input from the knowledgeable folks on these forums. Here is a very brief rundown of my situation:

- First time home buyer (FHA?), looking at 2-4 unit multi family

- Focused on North Side (LP, Lakeview, Roscoe Village, Bucktown, Wicker Park, etc.)

- I’ve saved a decent amount for a down payment, have excellent credit, and a relatively higher salary from working for a technology firm

- I’m a single guy in my early 30’s so I have a lot of flexibility for living arrangements

One of my main questions is roughly what % I need for a down payment, and what is the rough debt to income ratio a lender would be looking for? I had a casual conversation with a real estate agent that typically sells condos, and he said for multi family in Chicago, you need 20-25% down and ~6 months of cash in the bank. That seemed quite different than what I had heard on BP, but wanted to ask this group.

Thanks VERY much for your input! I really appreciate it. Hope to learn more from this group.

Jake

@Jake Kinney , if you qualify for an FHA, it is my understanding you can put down as little as 3% down. Remember, the more leverage you use, the less cash flow you will receive, so sometimes putting a little more down doesn't hurt. Talk to a lender and find out what you can qualify for.

@Jake Kinney I just sent you a DM of our guest last week @Christopher Puleo who spoke all about House Hacking financing.  Very informational 45 minutes on house hacking in Chicago specifically.

- you can do FHA with 3.5% down but you won't be anywhere near those areas as FHA loan limits are very low. FHA also has a self sufficiency test on 3&4 unit properties which less than 5% of properties actually pass it. Conventional is 15% on a 2 unit and 20% on a 3&4 unit.

@Jake Kinney

@Zack Karp would be an invaluable resource to connect with regarding financing.

Originally posted by @Mark Ainley :

@Jake Kinney I just sent you a DM of our guest last week @Christopher Puleo who spoke all about House Hacking financing.  Very informational 45 minutes on house hacking in Chicago specifically.

Mark, thanks very much! I listened to the entire episode and found it extremely informative.  

Originally posted by @Brie Schmidt :

- you can do FHA with 3.5% down but you won't be anywhere near those areas as FHA loan limits are very low. FHA also has a self sufficiency test on 3&4 unit properties which less than 5% of properties actually pass it. Conventional is 15% on a 2 unit and 20% on a 3&4 unit.

	FHA Loan Limit	Max Purchase 3.5%
2 Flat	$485,800	$503,420
3 Flat	$587,250	$608,549
4 Flat	$729,800	$756,269

 Hi Brie, thank you for the info! I listened to your interview on Straight Up Chicago and really enjoyed it. Would love to talk sometime. 

Originally posted by @Jake Kinney :

Hello everyone- long time reader/listener to BP, first time poster. I am looking to house hack somewhere on the north side of Chicago and wanted to get some input from the knowledgeable folks on these forums. Here is a very brief rundown of my situation:

- First time home buyer (FHA?), looking at 2-4 unit multi family

- Focused on North Side (LP, Lakeview, Roscoe Village, Bucktown, Wicker Park, etc.)

- I’ve saved a decent amount for a down payment, have excellent credit, and a relatively higher salary from working for a technology firm

- I’m a single guy in my early 30’s so I have a lot of flexibility for living arrangements

One of my main questions is roughly what % I need for a down payment, and what is the rough debt to income ratio a lender would be looking for? I had a casual conversation with a real estate agent that typically sells condos, and he said for multi family in Chicago, you need 20-25% down and ~6 months of cash in the bank. That seemed quite different than what I had heard on BP, but wanted to ask this group.

% you need for a downpayment ranges from 3.5% (FHA) to 20% (Conventional)

Debt to Income Ratio- Usually 35 to 38%

6 months cash reserves is what you should have irregardless of what a bank says. It's a CYA number.

@Jake Kinney - You should definitely link up with @Brie Schmidt who commented above.  She works in those areas and would more than likely be a really good fit for you.  Alternatively, @Sarita Scherpereel would be a good real estate agent for that area.

Also, sounds like you need to speak with a lender who understands investing, connect with @Michael Facchini or @Zack Karp , both of them work with investors and set up straight.

I am not a fortune teller, but I can tell you are definitely on the right path and a property is in your future haha

Reach out if there is any other way we can help you.

Thank you, Jonathan! Appreciate the info and kind words.