Owner Occupied Property

[Geo A.]

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?

[Upen Patel]

@Georges A. If you truly going to live in the new property, then you can:

• 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.

Good luck.

Upen Patel, Mortgage Banker