Hi BP, I have want to sell my primary residence and buy a duplex to house hack. My wife and I already have duplex through a conventional loan, that is cash flowing. Will the bank allow us to get an FHA loan with little money down in order to get an owner occupied multi-family? Do I have to complete sale of my primary residence first? Will they make me put down 25%? What if we don't have 25% in order to buy duplex?
Hey @Roland Cheek good news, you should be able to keep your duplex and get an FHA loan on a duplex for 3.5% down. Before you go all in, I would double-check with a lender to make sure your loan is in fact a conventional loan.
@Brad Hammond so we have our primary residence single family home with a conventional Loan and we have rental property duplex with a conventional loan. I want to sell the single family and keep the rental property. So will the bank allow me to get a fha loan with little down before I sale my single family?
So the issue I see with that is if your debt to income ratio can support a single-family home and a duplex. If so, great! If not, you will need to sell the single-family before closing on the duplex. This can be tricky, but there are a few options. You can take a HELOC out on your primary residence, and use that for your down payment. Then sell your single-family home. You could also write into the contract of your next duplex that it is contingent upon you selling your single-family home. That is best if it is on the market and you have a pending offer.
@Brad Hammond ok thank you
@Roland Cheek keep it all, don't sell! If you've had the investments for a couple years, they should be able to count a portion of the rents toward your DTI.
I bought my house with an fha loan. Applied my commission of 3% to closing, darn near 0 out of pocket to walk into it. Market went up and did some updates, refinancing to conventional. Now I can pull the trigger again on an fha loan with almost nothing down if/when we find a property worth moving for. I would advise to do something like that, even if you’re not licensed and have to come up with the 3.5% for the fha loan.
You should be good to get an FHA loan. Probably good to check with your mortgage broker first though. I love the house hack model, works great!