Hello all, I am currently in the pre-approval process for a multi-family unit (house hack) in Cleveland. I am looking to put about 5% down for a home- however one realtor I have been working with stated sellers have been less willing to work with FHA loans in comparison to conventional loans. I am hesitant to put the full 15% downpayment, but want to know that if I go for the FHA I will actually be able to find a home. Has anyone had troubles with this or have any advice?
Real Estate Agent/Investor · Peoria, AZ · Member since 2016 · 2k+ posts · 2k+ votes
5y
@Meghan Rahill
FHA tends to have a few more hoops to jump through vs conventional and I can understand why a seller would prefer conventional loans vs FHA ones.
With that being said, have you tried to get a conventional loan? You can put down as low as 3%.
The competition for multifamily properties isnt as high as compared to single family properties as most retail buyers don't want to be a landlord or wait for tenants to move out. If you're in a bidding war, FHA may cost you that property. If you're the first to make an offer, you should be ok.
Real Estate Agent/Investor · Peoria, AZ · Member since 2016 · 2k+ posts · 2k+ votes
5y
@Meghan Rahill
FHA tends to have a few more hoops to jump through vs conventional and I can understand why a seller would prefer conventional loans vs FHA ones.
With that being said, have you tried to get a conventional loan? You can put down as low as 3%.
The competition for multifamily properties isnt as high as compared to single family properties as most retail buyers don't want to be a landlord or wait for tenants to move out. If you're in a bidding war, FHA may cost you that property. If you're the first to make an offer, you should be ok.
Lender · Frisco, TX · Member since 2019 · 546 posts · 270 votes
5y
@Meghan Rahill Is your lender calling the sellers to let them know you have been thoroughly approved? If they are not doing that already, they should be. At the end of the day the seller is going to get paid no matter what loan program it is. If you are buying a duplex, the only way to get in with a low down payment is FHA. The low down payment conventional is no longer available for 2-4 units.
@Meghan Rahill Is your lender calling the sellers to let them know you have been thoroughly approved? If they are not doing that already, they should be. At the end of the day the seller is going to get paid no matter what loan program it is. If you are buying a duplex, the only way to get in with a low down payment is FHA. The low down payment conventional is no longer available for 2-4 units.
Yea but the issue is the odds of getting paid if a buyer is FHA are lower than if they are cash or conventional. If a seller can mitigate hoops and additional uncertainty they usually will.