I bought my first triplex owner occupied in Boston, MA and I currently live in it (I used Mass Housing). I bought my second triplex via partnership (investment property)in the same year. After the last winter, I realized that owning a house in Boston without a parking garage is a BIG MISTAKE. I live in a Not so nice neighborhood PLUS the snow that we get is just draining and I feel that I need a house with a garage. How hard is it to get a house (duplex or SF) that is owner occupied without having to put 20-25% down (as the bank may consider it as an investment property). I know FHA is probably my only option but would they even consider it? I am hearing different answers from different lenders but all I hear is that it's a long shot. Any advice?
- FHA: pro - Low down payment (3.5%), con - PMI that is with you for as long as you keep the loan + 1.75% mortgage insurance premium at closing
- Piggy back loan: If you have the credit and income to support it then you can get a 80% primary loan + 10% Home Equity Loan or HELOC (some lenders will do 15%). So, you only need to come up with 10% down. pro - you can save money and pay off the HE/HELOC and you are done with it. con - you have to come up with 10% down.
- Conventional with PMI: Put only 5% or 10% down and get a primary loan with PMI. pro - once you pay down the loan to an LTV of <=80% PMI goes away.
Upen Patel, Mortgage Banker
Thank you for your response. My convos with bankers got me to conclude that I will be taking a big risk with FHA (although I DO want to live in it). The reason is that I already have 2 properties and it will be hard convincing FHA that I truly want it to live in it.
I will investigate the piggy back loan option more.
If you are a US military vet you can use a VA loan. That is probably the single best loan in existence.
NACA is another Mass Housing type organization. But you are going to have to bypass a "first time homeowner" portion. I'm not sure how strict that is, but it could be worth going to one of the meetings.
I'll check it out . thank you @Aaron Montague
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