Updated almost 4 years ago on . Most recent reply
Getting Lenders for Multifamily
I've been talking to several lenders to do FHA loan for a triplex in Colorado Springs $530k. I currently house hack a 2/2 Condo and would rent it out. Lenders won't accept any profited rental income towards my income but will cancel out the debt if I provide them a lease. All good so far but this is where I ran into trouble... I'm told that if I'm going to rent out my current primary residence and purchase a multifamily (Triplex) as my next primary residence, according to FHA rules that property must be more than 100 miles away from my 2/2 condo. Because of this I won't be able to go the route of a multi-family property as my next property (One that the numbers work and in good location that is).
Has anyone run into this type of trouble before? And have any advice or good lenders to work with to help in this situation?
- Tanner Pile
Most Popular Reply
Hey Tanner, it sounds like your options are to either purchase the triplex for 25% down or refinance your FHA loan into a conventional loan. If you want to move on the triplex soon, you should start the refinance process for the condo ASAP. An investment property condo refinance has a max LTV of 75%. If you are not already at 75% LTV, you'll need to bring funds to close to reduce the principal down to 75% LTV. Then you can purchase the triplex FHA once your condo is under a conventional loan.