Financing SFR with Section 8 Tenant - Special Financing Available?

Question

I am considering the purchase of an SFR that is currently leased to a section 8 tenant and was wondering if there were any specific lenders or programs that I should be looking into for financing beyond traditional methods?

Any insight is greatly appreciated, thanks!

Ned Carey · Answer

@Dallas Rapoport I am not aware of any financing specifically for your situation. My guess is it does not exist in the private financial markets.

There may be programs that city, county or State governments have to support low income housing. These may not be well pucblicized so you may have to make a lot of calls to find out if anything exists.

Scott Johnson · Answer

Section 8 isn't my bag, but I'm only chiming in to say that I don't believe there are any lending programs that have different terms for property used as a Section 8 Rental.

Now there are local programs in the Greenville Community that are in place to entice people to rent to Section 8 tenants. I don't know of them specifically (I still need to schedule a call with the Community Development Coordinator), but these can be tax incentives, down payment assistance, etc. It just depends on your local community's goals and what's passed by the County Commissioners or City Council.

I'd start with reaching out to your local Zoning Board and talking a bit with them.

Erik Estrada · Answer

Hey Dallas,

You could finance this property with a standard DSCR loan. As long as the rents cover the full mortgage payment, you qualify.

Patrick Drury · Answer

@Dallas RapoportI don't believe such a product exists. The best option may be a conventional mortgage with 15% down on the single-family if you want to put minimal down. Although, this will come with mortgage insurance. I would check with a lender though and they can give you more specifics. The first rental I bought was a single-family rented out via section and that's what I did.

Financing SFR with Section 8 Tenant - Special Financing Available?

Most Popular Reply