​Which Of these 2 financing scenarios should I pursue?

[Patrick Martone]

Our goal is to househack and rehab a 4plex with my father. Looking in NJ, FL, and TX.

We have an LLC, perfect credit, own two homes, and 3 vehicles. I have 100k cash, a 401k and appreciating stocks.

My dad will pay the mortgage monthly and I will make the down payment.

I want to purchase a second MFH 3 years after my first MFH, so I don't want to put all my cash on the table.

Scenario 1 (20% or less down on conventional loan or 30 yr mortgage, or commercial loan):

1. How can our assets help me make a larger down payment? Or at least speed up the loan approval process?
2. Can the LLC provide any financing advantages?

Scenario 2 (Streamlined FHA Loan):

1. Can you use a streamlined 203k loan purely for the 3.5% down payment? Or does it need to require rehab?
2. What is required to become pre-approved for a FHA loan?
3. What other FHA alternatives are there where I can contribute less than 20% on a down payment?

[Chris Mason]

Hi @Patrick Martone,

Before you go too far down the FHA MFR rabbit hole, drill down on the EXACT market. Urban New Jersey is not rural Texas.

To give you a specific example, in the core Bay Area markets FHA offers on MFRs found on the MLS simply do not get accepted. So unless you're going to find homes off-market, it would be a waste of your time. But that's the Bay Area (outer Bay Area suburb markets differ), which isn't one of the places you listed.

Freddie Mac has a 5% down 2-4 unit FTHB option that has income caps by census tract. Which means you'd need to house hunt by census tract for that to be viable.

Pick a market, and talk to agents in it. A home purchase is not a "financing scenario," because "financing scenarios" are irrelevant until and unless you actually have an offer accepted.