Investor · Santa Rosa Beach, FL · Member since 2013 · 50 posts · 7 votes
Hi all
I have a rental Property (on an investment loan with 20% down) that cash flows and has increased my income and buying power for my next property. I'm now looking at purchasing a primary residence to house hack for a year and have found one 20% below market value completely rehabbed for $186K. I am struggling to get a 3% down loan due to my rental though. 5% down is all I can find. Any thoughts or suggestions?
Lender · Point Lookout, NY · Member since 2017 · 88 posts · 22 votes
9y
If the investment properties cash flow then they should have no negative impact on your ability to get a primary mortgage. They should only help your DTI if that is the case. Is it a short sale that doesn't qualify for FHA financing? Which i assume is what you are inquiring about at less that 5% down.
Investor · Santa Rosa Beach, FL · Member since 2013 · 50 posts · 7 votes
9y
hi Jason. Not a short sale but a homepath property. My broker is struggling with 3% down as USDA criteria isn't met with another house in my name, presumably the same problem with FHA. The rent does indeed increase my income so the purchase price is covered, just trying to minimize the outlay.
Lender · Point Lookout, NY · Member since 2017 · 88 posts · 22 votes
9y
True about USDA guidelines, FHA should only deal with owner occupied residences. So as long as you fit into income and DTI guidelines, you should have access to FHA financing on your primary, just remember that means you will have to pay PMI, so taking the time to compare upfront savings vs long term advantages is imperative.
Investor · Pittsburgh, PA · Member since 2015 · 1k+ posts · 1k+ votes
9y
@Kelvin J.As long as this is going to be your primary residence nd you don't have another existing FHA loan then you should qualify for FHA. Unless its above their allowable lending limit. There is a purchase price limit for FHA which I think is different in all areas. Our average home sale price here is $160k where in Santa Rosa it may be $300,000. Also cant hurt to try another lender. All lenders are not created equal. Talk with a few others before you throw in the towel.
Investor · Santa Rosa Beach, FL · Member since 2013 · 50 posts · 7 votes
9y
Can anyone point me to a lender that will loan on a primary residence I am trying to buy, with 3% down while I have a rental property. This is what my broker said "I went through every 3% down program we have. I can’t find anyone that will accept the fact that you own another residential property. It looks like we are stuck with the 5% down program"
Lender · Fort Worth, TX · Member since 2016 · 8k+ posts · 6k+ votes
9y
@Kelvin J. your initial request was to find a 3% down payment loan. That is the Fannie Mae "HomeReady" loan. FHA will require 3.5% down but the HomeReady loan is 3% down. That loan does have some income restrictions but it is possible to find that loan. Not every lender has it though but based on your initial post that might be the right loan for you to examine. Thanks!
Investor · Santa Rosa Beach, FL · Member since 2013 · 50 posts · 7 votes
9y
Thanks Andrew. I'm not sure why my broker can't find a loan. Apparently, it's the rental property I have getting in the way. Still looking for a broker to find the right loan when I need it.