All
Members
Companies
Blog
Forums
Podcast
Webinars
    User Log in  /  Sign up
  • Forums
    Newest Posts Trending Discussions Followed Forums Real Estate News & Current Events General Landlording & Rental Properties Buying & Selling Real Estate Deal Analysis See All
  • Education

    Read

    BiggerPockets Blog BPInsights: Expert Analysis Guides Glossary Reviews Member Blogs

    Watch

    Webinars Video Library Financial Independence Blueprint Intro to Real Estate: Rentals

    Listen

    BiggerPockets Real Estate Podcast BiggerPockets Money Podcast BiggerPockets Business Podcast Real Estate Rookie Podcast Daily Podcast (Audio Blog)

    Topics

    Business Operations Finance Finding Deals Property Management Property Types Strategy
  • Network

    Recommended Vendors

    Real Estate Agents Mortgage Lenders Hard Money Lenders Insurance Contractors Investment Companies Build Your Team

    Search

    Members Events Jobs
  • Tools

    Calculators

    Rental Property Fix and Flip BRRRR Rehab Estimator
    Wholesaling Mortgage Payment 70% Rule Airbnb

    Services

    BPInsights: Property Insights Tenant Screening Property Management Lease Agreement Packages

    New Feature

    BPInsights (beta)

    Quickly analyze a property address or ZIP Code to compare your rent in your neighborhood.

    Analyze a property
  • Find Deals
    Real Estate Listings Find Foreclosures External Link Ads, Jobs, and Other
  • Bookstore

    Real Estate Books

    Profit Like The Pros Bidding to Buy See all books

    Featured Book

    BiggerPockets Wealth Magazine book cover
    BiggerPockets Wealth Magazine

    Written by financial journalists and data scientists, get 60+ pages of newsworthy content, expert-driven advice, and data-backed research written in a clear way to help you navigate your tough investment decisions in an ever-changing financial climate! Subscribe today and get the Oct/Nov issue delivered to your door!

    Get the Magazine
  • Pricing
Log In Sign up
User
Quick search links
Podcast Hard Money Lenders Books Washington
ForumsArrowPrivate Lending & Conventional Mortgage AdviceArrowRecommendations for lenders for conventional loan & low down pymt
  • Newest Posts
    • Newest Posts
    • Unanswered Discussions
  • Trending
    • Top Discussions
    • Trending Discussions
  • Browse Forums
Search Nova
Create post

Recommendations for lenders for conventional loan & low down pymt

12 Replies

  • Share on Facebook
  • Share on Twitter
  • Share on LinkedIn
Rotate Log in or sign up to reply
user profile avatar
  • Posts 17
  • Votes 3

Shane M
Real Estate Investor from Kansas City, MO

posted over 3 years ago

What's up BP community? I've got a buddy trying to post a question on this forum, but he's having trouble getting his account set up for some reason. Being the good friend I am, I told him I'd post his question. So without further ado, here it is verbatim:

"I am new to real estate investing and my plan is to buy a duplex to live in one of the units and also rent my current house. I am preapproved for an fha loan with 3.5% down but many of the sellers in Kansas City do not want to sell to fha loan buyers. My bank does not have Conventional loans with low down payments of 3% or 5%. Does anyone know of any lenders that have a low downpayment Conventional loans of 3 to 5%? I will also take any creative ideas that you have to get a new investor started."

Thanks all! 

Rotate Log in or sign up to reply
user profile avatar
Check Rosette Top Subjects:
Team, Rentals, and Traditional Financing
  • Posts 62
  • Votes 22

Shane Short
Real Estate Agent from Portland, OR

replied over 3 years ago

I’m also in the exact same situation. Except I don’t own a home already. I’m currently renting, by March 6th of 2018 (when my current lease ends) I’d like to purchase a fourplex with 15-20 grand to use. It will be my first investment in real estate. I was going to go around Portland tomorrow and talk to some banks to see if they, or any banks they know, can do a low interest conventional loan.

Rotate Log in or sign up to reply
user profile avatar
  • Posts 403
  • Votes 200

Mathew Wray
Real Estate Agent from Portland, Oregon

replied over 3 years ago

Good morning ShaneX2!

Shane Short, you're off to a great start! I'm an agent here in Portland and I bought my first couple rentals using FHA and VA low-down loans. It's a good strategy to get going. I'd save your time going to random banks (unless you have an "in" or referral.) send me a PM and I'll give you the names of lenders I've personnaly used who will help make your loan process a breeze!

Shane M., although I'm not in the Kansas area, maybe I can provide some general guidance? Good on your friend for continual movement and growth towards his goal! Other options exist for low-down loans, although FHA backed loans are the most common-he may just have to keep at it until he finds a buyer who doesn't mind the loan. It'll take longer, but is doable. If he's having trouble with an agent, let me know and I'll get him a couple recommendations. In the meantime, check USDA Rural loans, depending on where in the KC, MO area he's looking the properties may qualify. If that's not an option is he a veteran, first responder, or teacher? There are specialty programs for those professions. Cities sometimes partner with non-profits to provide grants to certain areas or people but those are going to require local knowledge. Have him PM or call me and I can make a couple recommendations for folks on the ground to help him out.

Best of luck to both of you! 

Rotate Log in or sign up to reply
user profile avatar
  • Posts 21K
  • Votes 12K

Wayne Brooks
Real Estate Professional from West Palm Beach, Florida

replied over 3 years ago

There are no 3-5% down conventional loans for a duplex, only an owner occupied single family home.  I think it's 15% down minimum on a duplex, but you can google it up......Fannie Mae loans.

Rotate Log in or sign up to reply
user profile avatar
  • Posts 471
  • Votes 251

Michael Cohen
from Towson, Maryland

replied over 3 years ago
Originally posted by @Wayne Brooks :

There are no 3-5% down conventional loans for a duplex, only an owner occupied single family home.  I think it's 15% down minimum on a duplex, but you can google it up......Fannie Mae loans.

FHA allows 3.5% down for a 1-4 unit provided it is owner-occupied.

Rotate Log in or sign up to reply
user profile avatar
Check Rosette Top Subjects:
Team, Residential, and Rentals
  • Posts 7.0K
  • Votes 3.2K

Andrew Syrios (Moderator) -
Residential Real Estate Investor from Kansas City, MO

replied over 3 years ago

Here are some lenders we've had luck with:

- Bank 21

- Cornerstone Bank

- Fidelity Bank

- Great American Bank

- TriCentury Bank

Good luck!

Rotate Log in or sign up to reply
user profile avatar
  • Posts 21K
  • Votes 12K

Wayne Brooks
Real Estate Professional from West Palm Beach, Florida

replied over 3 years ago
Originally posted by @Michael Cohen :
Originally posted by @Wayne Brooks:

There are no 3-5% down conventional loans for a duplex, only an owner occupied single family home.  I think it's 15% down minimum on a duplex, but you can google it up......Fannie Mae loans.

FHA allows 3.5% down for a 1-4 unit provided it is owner-occupied.

Michael, yes I and the OP know that.....he was asking about conventional loans. 

Rotate Log in or sign up to reply
user profile avatar
  • Posts 471
  • Votes 251

Michael Cohen
from Towson, Maryland

replied over 3 years ago

My apologies; I missed that!!

Rotate Log in or sign up to reply
user profile avatar
Check Rosette Top Subjects:
Team and Flipping
  • Posts 1.2K
  • Votes 857

Kevin Romines
Lender from Winlock, WA

replied over 3 years ago

@Shane M Freddie Mac has a loan called Home Possible, which will allow 5% down on a 1-4 unit as owner occupied. I would look into that loan.

Rotate Log in or sign up to reply
user profile avatar
Check Rosette Top Subjects:
Real Estate Finance, Flipping, and Team
  • Posts 4.6K
  • Votes 3.5K

Andrew Postell
Lender from Fort Worth, TX

replied over 3 years ago

@Shane M the posts here have been helpful but I wanted to give a little more clarification so your friend knows what to look for and how to ask for it. 

Conforming, Conventional loans are governed by Fannie Mae and Freddie Mac (if you recognize those names).  The banks actually have no say on how these loans approve a borrower - Fannie/Freddie tell them what to do.  There is a loan type that has 5% down if you make below a certain income level or if the property is located in a specific "tract" of land.  Not every bank offers this loan and that's if you qualify for it.  You certainly might qualify for it so definitely ask about it.  15% down minimum is the normal requirement on a 2-4 unit that you occupy. 

However, there are other loan types out there.  I'll call these "portfolio" loans (sometimes called commercial).  Portfolio loans come from the bank's own portfolio of money (thus the name) so this is money that Fannie/Freddie does not control - the bank itself controls it.  So there could be a portfolio loan solution out there.  I say "could" because since each bank controls it's own money you would literally have to call each and every bank out there to find out their portfolio loans.  Most investors use small to mid-sized banks.  The bigger the bank the less likely they are to have a solution.  If it's a bank with one location and you've never heard of that bank...then that will be a good bank to call!  I do feel finding this type of a loan with this low of a down payment would be extremely difficult.  A mortgage broker might be a good person to know as well.  A broker represents many different banks.  Might save you a phone call or two.  Do not be surprised if you have to call 200 banks to find your loan.

Hope this helps!

Rotate Log in or sign up to reply
user profile avatar
  • Posts 31
  • Votes 11

Daniel Helland
from Vancouver, Washington

replied over 3 years ago
@Shane Short We recently used Aaron Coker at RPM for our FHA loan. Great experience.
Rotate Log in or sign up to reply
user profile avatar
  • Posts 17
  • Votes 3

Shane M
Real Estate Investor from Kansas City, MO

replied over 3 years ago

Thank you for all the responses. My buddy is off and running now

Rotate Log in or sign up to reply
user profile avatar
  • Posts 994
  • Votes 316

Melvin List
Lender from Tampa, Florida

replied over 3 years ago

@Shane M I would first find a lender that has Freddie's Home Possible Program and see if you qualify.

Rotate Log in or sign up to reply
  • 1
Related Resources Private Lending & Conventional Mortgage Advice
Should You Buy Mortgage Discount Points?
How I Find Private Money Lenders to 100% Fund My Deals (& How You Can, Too)
Mortgage Interest Deductions 101: What You Should Know
Best Deal Ever: Making a Good Deal Great by Negotiating Seller-Held Terms
4 Golden Rules of Real Estate Investing
Resources Read, see, and learn more!
Link Real Estate Investment Calculators
Link BiggerPockets Blog
Link Path to Purchase
Link Mortgage Loans
Link Find a Contractor
Link Real Estate Agents
Link Hard Money Lenders
Link Real Estate Listings

Top Contributors

Stephanie P.
Stephanie P.
Washington, DC Mortgage Lender/Broker
9.29
Score
Chris Mason
Chris Mason
Oakland, CA
6.37
Score
Michael Plante
Michael Plante
Deland, FL
5.37
Score
Ryan Copeland
Ryan Copeland
Columbia, SC
5.19
Score
Eric Veronica
Eric Veronica
Toledo, OH
4.71
Score

Private Lending & Conventional Mortgage Advice Trending Discussions

  • Is it hard to get a Cash out refinance on duplex investment
    10 Replies
  • Can you normally rent any home full-time after one year?
    2 Replies
  • Out of State Financing for Texas property
    7 Replies
  • I need an agreement for my private money lender as 1stlien holder
    4 Replies
  • We Loaned on a Stolen House
    65 Replies
Log in Sign up

Log in

Forgot password?

If you signed up for BiggerPockets via Facebook, you can log in with just one click!

Log in with Facebook

Or
btn_google_dark_normal_ios Created with Sketch. Continue with Google

Let's get started

We just need a few details to get you set up and ready to go!

Use your real name

Use at least 8 characters. Using a phrase of random words (like: paper Dog team blue) is secure and easy to remember.

By signing up, you indicate that you agree to the BiggerPockets Terms & Conditions.

Or
btn_google_dark_normal_ios Created with Sketch. Continue with Google

Why create an account?

Receive a free digital download of The Ultimate Beginner's Guide to Real Estate Investing.

Connect with 1,000,000+ real estate investors!

Find local real estate meetups and events in your area.

Start analyzing real estate properties, we do the math for you.

It's free!

Explore

  • Membership
  • Community
  • Education
  • Marketplace
  • Tools
  • FilePlace
  • REI Resources
  • Perks
  • Glossary
  • Reviews
  • iOS App
  • Android App

Company

  • About Us
  • Press
  • Advertising
  • Careers
  • Stats
  • Contact Us

Important

  • Editorial Guidelines
  • Terms of Use
  • Rules
  • Privacy
  • FAQ

Social

  • Facebook
  • Twitter
  • YouTube
  • Instagram
© 2004-2021 BiggerPockets, LLC. All Rights Reserved.