House Hack Down Payment

Jersey City, New Jersey
Private Lending & Conventional Mortgage Advice
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House Hack Down Payment

Cody O'Connor
Member since 2020 · 3 posts · 1 vote

Hi Everyone - I am looking to do my first house hack in New Jersey. I want to purchase a multifamily unit that has one 3/3 and one 3/2. My understanding is that I would be able to do this with 5% down, but I just got off the phone with a lender who told me that I needed to put down 15%-20% minimum. Can anyone confirm if this is correct?

Additionally, would I be able to use projected rental income to help qualify? 

Thanks! 

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Yinka TaiwoPro Member
Rental Property Investor · Atlanta, GA · Member since 2022 · 52 posts · 16 votes
4y

@Shawn Mcenteer which lender is that, if you don't mind sharing? My lender is saying 15%

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  • Mike Davis
    Lender · Annapolis, MD · Member since 2022 · 154 posts · 70 votes
    4y

    @Cody O'Connor if you are planning on living in one side, you can apply for an FHA loan with 3.5% down.

    1Reply
  • Cody O'Connor
    OP
    Member since 2020 · 3 posts · 1 vote
    4y
    Quote from @Mike Davis:

    @Cody O'Connor if you are planning on living in one side, you can apply for an FHA loan with 3.5% down.


     Thanks Mark! This helps! 

    0Reply
  • Paul DefnginPro Member
    Lender · Rockville, MD · Member since 2008 · 498 posts · 199 votes
    4y
    Quote from @Cody O'Connor:

    Hi Everyone - I am looking to do my first house hack in New Jersey. I want to purchase a multifamily unit that has one 3/3 and one 3/2. My understanding is that I would be able to do this with 5% down, but I just got off the phone with a lender who told me that I needed to put down 15%-20% minimum. Can anyone confirm if this is correct?

    Additionally, would I be able to use projected rental income to help qualify? 

    Thanks! 

    In the current seller’s market going FHA with your offer is challenging. You can still do 5% down conventional financing provided your income is at or below the property the average median income for that area where the subject property is at, and that you’re occupying one of the units which it seems that you are. 

    Good luck. 
    0Reply
  • Kevin P.
    Investor · NJ · Member since 2017 · 46 posts · 24 votes
    4y

    If you get an FHA loan and you're going to be an owner occupant I know it's either a 3 and 1/2% or a 5% down payment. I'm not sure what your real estate agent was referring to but this is a very common loan and one that I have obtained myself. You will also need to pay a certain percentage in premium and you will have to pay for private mortgage insurance or PMI. You can even get money for rehab which is what I did.

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  • Kevin P.
    Investor · NJ · Member since 2017 · 46 posts · 24 votes
    4y
    Quote from @Paul Defngin:
    Quote from @Cody O'Connor:

    Hi Everyone - I am looking to do my first house hack in New Jersey. I want to purchase a multifamily unit that has one 3/3 and one 3/2. My understanding is that I would be able to do this with 5% down, but I just got off the phone with a lender who told me that I needed to put down 15%-20% minimum. Can anyone confirm if this is correct?

    Additionally, would I be able to use projected rental income to help qualify? 

    Thanks! 

    In the current seller’s market going FHA with your offer is challenging. You can still do 5% down conventional financing provided your income is at or below the property the average median income for that area where the subject property is at, and that you’re occupying one of the units which it seems that you are. 

    Good luck. 

     This is a really good point. About that, I was going to get pre-qualified with the better mortgage company. The name of the company is better. They are doing a cash offer where they will provide cash up front for a pre-qualified buyer. I'm thinking of using it myself. It's worth checking out so that you're offer will be competitive.

    0Reply
  • Nick BelskyBusiness Member
    Lender · Orlando, FL · Member since 2021 · 1k+ posts · 704 votes
    4y

    @Cody O'Connor

    House Hacking on a Conventional Loan is 15% down. FHA is 3.5% if First Time Home Buyer, possibly 5% if not. Very common loan. If using FHA, you must agree to live in the home for at least 12 months before moving out.

    Cheers!

    [email protected]
    Belsky Mortgage, LLC522 Reviews
    WebsiteView Page
    1Reply
  • Joseph Guzzardi Jr
    Rental Property Investor · Member since 2019 · 411 posts · 148 votes
    4y

    @Cody O'Connor if you don't own any other property than FHA with 3.5% down is your lowest down payment option. You can even have a family member gift you a portion of the funds. Do not let your golden ticket of FHA go to waste!

    Sincerely, a multi family property owner, investor and agent

    0Reply
  • Shawn McenteerBusiness Member
    Realtor · Boonton Township, NJ · Member since 2013 · 2k+ posts · 1k+ votes
    4y

    @Cody O'Connor I would avoid FHA at all costs, there are lenders using low money down conventional mortgages for MFR's. Most lenders will only tell you the loans they offer, very few will direct you to someone else. Most lenders also think low money down conventional financing does not exists for MFR. We are closing on a 600k Duplex property tomorrow using conventional 5% down with NO PMI. Just imagine how much money you could save per month with PMI. Keep looking around!

    973-975-3895
    House Hacking New Jersey563 Reviews
    WebsiteView Page
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  • Yinka TaiwoPro Member
    Rental Property Investor · Atlanta, GA · Member since 2022 · 52 posts · 16 votes
    4y

    @Shawn Mcenteer which lender is that, if you don't mind sharing? My lender is saying 15%

    3Reply
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