Florence, NJ · Member since 2017 · 12 posts · 1 vote
So here is my situation. I'm buying my first house, I have great credit, I have 5% down, and I'll be owner occupying a tri-plex in new Jersey. So I was under the impression that FHA was my only option. But does anyone know of other mortgage loan options that are available for my situation? A VA loan is not an option bcuz I've never served. I heard of USDA loans and a home ready loan but I'm unsure if those types of loans are available for multi family. Does anyone know or have any other options that might be available? Thx.
Freddie Mac Home Possible. Not all lenders offer it, but you're doing yourself a disservice if you do not consider it and find a lender that'll lay out both options. I'm a huge fan of it, so you can find longer write-ups on it by me in my post history if you check.
Freddie Mac Home Possible. Not all lenders offer it, but you're doing yourself a disservice if you do not consider it and find a lender that'll lay out both options. I'm a huge fan of it, so you can find longer write-ups on it by me in my post history if you check.
@Eric Bradis, Freddie Home Possible is possible, FNMA homeready on a 3-4 unit is 75% LTV. You can go on Freddie's website and they have an eligibility tool you can see if the property qualifies with AMI (Area Med Income).
Home ready can be option for triplex. USDA loan tied to property address.
Hi Harjeet,
Last time I did a thorough analysis of FNMA HomeReady with the question "why would I use this over FHLMC Home Possible for a 2-4 unit property," I couldn't identify a niche application. Specifically, I didn't like what I saw when I looked at LTV w/ 2-4 units. Apparently I missed something. What's the niche where you'd use FNMA HomeReady for MFR, and not vanilla Fannie, Freddie Home Possible, or FHA?
It will be local. We have the USDA option here, but it has to be in an area that can be agricultural or has agricultural in it. For instance there is a road in our County that you cross, anything west is USDA eligible and anything East is not. USDA is a nice no money down option, but it does require an inspection from the feds sooooooo.
I'm pretty sure TD Bank does 3% down for multi units. They're the only bank I could find that does this. I wanted to go with them but apparently they serve east coast only-so it might be something you want to look into. https://www.tdbank.com
Chris Mason does Home Ready require 5% for duplex or triplex, or just 3%? What does PMI look like compared to conventional 5% or FHA?
It's 5% for Home Possible. For good credit scenarios, PMI will come in about the same or cheaper. And it drops off once you have the equity, unlike FHA. It's an important distinction w/ FHA that it does not drop off once you have the equity. What if in 3 years when you have the equity, prevailing market interest rates have returned to their historic norms of 6.5% or 7.5%? You will be glad you did conventional where you get to keep the rate you locked when you purchased.