Boston - Advice on mortgage types for owner occupied 2-4 family

Boston, Massachusetts
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Boston - Advice on mortgage types for owner occupied 2-4 family

Brian C Kelleher
East Boston, MA · Member since 2019 · 6 posts · 2 votes

Hi All,

I am looking to buy an owner occupied 2-4 family in the East Boston/Chelsea area this spring with a 5-10% down payment. I already own a 2 family house in the Boston area so this would not be first time home buyer. 


What are some of the most advantageous loan types you've heard of for this? I am looking at FHA and the new Fannie Mae 5% down payment program, but someone mentioned a 5% down payment program with Cambridge Savings Bank that had no PMI. Do you know anything about this or any other low down payment programs with no PMI? How about any grants available for a second time owner occupant home buyer? Any advice would be greatly appreciated.

Brian

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Lien VuongBusiness Member
Real Estate Agent · Boston, MA · Member since 2018 · 2k+ posts · 1k+ votes
2y

The Cambridge Savings is an awesome program but I do not believe you'd qualify bc you have already purchased a home. You can try DACA which has no PMI and limited closing costs. Unfortunately because loan programs change so rapidly, you might have to manually call local banks yourself for programs as they evolve their lending guidelines.

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  • Jacopo Iasiello
    Investor · Miami Beach, FL · Member since 2017 · 362 posts · 109 votes
    2y

    Hi Brian, It's great to hear that you're exploring your options for purchasing another owner-occupied property in the East Boston/Chelsea area! Here are some insights into loan types and potential programs that could be advantageous for your situation: 
    FHA Loan,Conventional Loans with Low Down Payment,Local Bank Programs,Grants and Assistance Programs,When exploring loan options and assistance programs, it's important to compare the terms, eligibility requirements, and overall costs to find the best fit for your financial situation and goals. Working with a knowledgeable mortgage lender and real estate agent who understands the local market and available programs can also be invaluable in guiding you through the homebuying process. Good luck with your home search!

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  • Derek BrickleyBusiness Member
    Lender · Ann Arbor, MI · Member since 2021 · 686 posts · 234 votes
    2y

    Hey Brian! Do you have a mortgage on your current home? Reason I ask is you can only have one FHA mortgage at a time. Generally there are very few grants/down payment assistance options for those who are buying multifamily homes. I'm not familiar with what Cambridge might offer, but finding something without MI would only be small/local banks or credit unions like that with some portfolio product. The only down payment assistance for a duplex would be with an FHA loan. At that point, we can cover the 3.5% down payment for 100% financing. That would not work for a 3-4 unit home though.

    [email protected]734-645-7722
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  • Daniel McDonald
    Real Estate Agent · Beverly, MA · Member since 2019 · 358 posts · 308 votes
    2y

    I bought both my house hacks in Beverly, just north of the city using an FHA. I just needed to refi out of the 1st one to be able to use the second. I haven't heard of getting out of PMI and would be cautious what fees would make up for it on the back end. Sounds to good to be true but I think the new 5% conventional route is solid!

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  • Jacob Sherman
    12 Penns Trail Suite 138 Newtown, PA 18940 · Member since 2023 · 1k+ posts · 319 votes
    2y

    How long have you owned the current one that you're in ? 

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  • John Burke
    Lender · Temple, Texas/Nationwide · Member since 2024 · 87 posts · 24 votes
    2y
    Quote from @Brian C Kelleher:

    Hi All,

    I am looking to buy an owner occupied 2-4 family in the East Boston/Chelsea area this spring with a 5-10% down payment. I already own a 2 family house in the Boston area so this would not be first time home buyer. 


    What are some of the most advantageous loan types you've heard of for this? I am looking at FHA and the new Fannie Mae 5% down payment program, but someone mentioned a 5% down payment program with Cambridge Savings Bank that had no PMI. Do you know anything about this or any other low down payment programs with no PMI? How about any grants available for a second time owner occupant home buyer? Any advice would be greatly appreciated.

    Brian


    As has been mentioned, if your current home has an FHA loan, FHA will not be an option for the new one. Let's say your current home has a conventional loan, FHA could be an option but you have to be aware of the self-sufficiency test requirements for anything over a duplex. This test could make it more difficult to qualify.

    Now that Fannie/Freddie have gone back to 5% down on multi units, as long as you have good scores and dti, conventional may be the best option.

    Be careful of lenders promoting no PMI options. They are either covering the PMI in the rate or it's a CRA program with income limits.

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  • Lien VuongBusiness Member
    Real Estate Agent · Boston, MA · Member since 2018 · 2k+ posts · 1k+ votes
    2y

    The Cambridge Savings is an awesome program but I do not believe you'd qualify bc you have already purchased a home. You can try DACA which has no PMI and limited closing costs. Unfortunately because loan programs change so rapidly, you might have to manually call local banks yourself for programs as they evolve their lending guidelines.

    [email protected]
    The Elle Group5152 Reviews
    WebsiteView Page
    2Reply
  • Eric Girard
    Real Estate Broker · Boston · Member since 2019 · 35 posts · 9 votes
    2y

    I wouldn't work with Cambridge Savings Bank, a lot of shifty stuff going on there. I tried to purchase a property and their appraiser seemed to be in bed with them and their criteria for me buying changed constantly.

    I switched lenders and closed in 2 weeks. They were a nightmare.

    0Reply
  • Dave Skow
    Lender · Seattle, WA · Member since 2014 · 2k+ posts · 899 votes
    2y

    @Brian C Kelleher- there are some lenders that  are  doing  95% ltv loans on owner occupied 1-4 unit purchases 

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  • Brian C Kelleher
    OP
    East Boston, MA · Member since 2019 · 6 posts · 2 votes
    2y

    Thank you all for the advice! I ended up with a Fannie mae loan at 15% down which was the only one that worked at this price point. 

    2Reply
  • Dave Skow
    Lender · Seattle, WA · Member since 2014 · 2k+ posts · 899 votes
    2y

    @Brian C Kelleher- thanks for the update .  Congrats  and keep you eye  on  refinancing  options  in the  future to improve on the mortgage  terms

    0Reply
  • Kyle Spearin
    Real Estate Agent · Boston, MA · Member since 2016 · 451 posts · 214 votes
    2y

    @Brian C Kelleher I did a 5% down with JDFCU with no PMI. Essentially they split up the loan into 2 loans to avoid it. This had 2 different interest rates, though so you'd want to look into what you would be paying on a monthly basis with that blended rate vs actually just paying the PMI.

    1Reply
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