Down payment assistance for multifamily home

8 Replies

Can I utilize down payment assistance to purchase a multifamily home in Houston, TX? The property is a first home buy, and will be  owner occupied. I spoke with a local realtor, and she told me that down payment assistance can only be used for single family homes. I've never come across this requirement when conducting my own research. Is she accurate?

Talk to some lenders who might know this answer. I personally don't know if you can get assistance for multi-family- it just says "primary residence". Depending on your occupation, I know of homes for heroes has these programs. This is a good question! 

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@Erica Hutchinson , great question!  I have no idea what the answer is as I've never explored the issue.  But keep asking good questions, probe for a better way to acquire a property, and always ask "How can I..." so you get people to think creatively for you.  There are a myriad of ways to structure acquisitions, only limited by your creativity.  Good luck!

@Erica Hutchinson , lending on anything over 5 units is considered a commercial loan so it is really up to the lender. Most will require a 20-30% downpayment.

For mid-sized loans ($5mm+) they may allow you to bring in some equity, but will require a certain percentage to be from the Key Principals (guarantors) and will require about 10% liquidity to be maintained through the loan term.

How large is the loan? Talk to some local banks and credit unions. If you bring in passive partners, remember to do a PPM and register an exemption for the securities.

Hope that helps.

Great post, I love the strategy you shared. @E. C. 'Stony' Stonebraker

@Erica Hutchinson Your best option is speaking with a lender. Please message me so I can provide you with recommendations. 

@E. C. "Stony" Stonebraker thank you! I agree creativity is key. Lack of income is my biggest obstacle, so I have to get creative in order to finance. Down payment assistance is a huge part of my plan, but now I've been thrown this lovely curveball, lol. I've spoken to two local realtors and one of them said no, while the other said yes. I was hoping the bigger pockets community could unanimously break the tie. But it looks like speaking with a couple lenders might very well be the best option @Wale Lawal. Thanks again everyone!

@Percy N. it'll be a residential loan for a duplex. I was counting on the FHA loan, paired with down payment assistance to fund this property so I could take advantage of being a 1st time home buyer.