What type of mortgage would work best for me?

Question

I'm looking into deal in Philly for a $250k triplex. I'd be jointly purchasing with one other person (we're not related), and he'll live in one of the units (I will not). He has great credit and more than enough income to satisfy the DTI restrictions, but since I will contribute part of the down payment and be on the title, while not living in the unit, do you all have suggestions of what type of lender or mortgage would best help us out?

Thanks!

Matt K. · Answer

What's the benefit of FHA if you're at 75% vs a conventional at 20%?

Michael W. · Answer

@Kevin R. - I've been offered the 'gifting' advice before, though it's not a gift right, it's in exchange for home equity?  Or is it enough to say it is not a loan?

I think separately, FHA doesn't allow gifts from non family members or "a close friend with a clearly defined and documented interest in the Borrower"?

Wondering if there might be portfolio lenders in PA that might take a look, but would be curious what the type of terms look like.

Kevin Romines · Answer

To answer the question, yes you can do that, however the LTV's change at that point because of the various factors, such as your not related. The LTV would change to 75%.

If you want to maintain a low down payment, then you might be able to gift the other person your portion of the down payment. Allow them to buy the property on their own, but you can also be listed on title. They are on the loan and on title, you are on title only. At that point, you can get away with 3.5% down payment.

You would need to check with the specific lender as to if you can gift and also be on title but not on the loan. If not, he would need to come up with his own 3.5% down payment, but you can be on title at that point?

Brian Garrett · Answer

That's a great question that I'm sure a lender here will chime in and answer.

I haven't spent much time looking into FHA since I don't have W2 and can't qualify.

Michael W. · Answer

Thanks @Brian Garrett - but would FHA allow me not to live in the home and be on the title + contribute to the down payment?

Brian Garrett · Answer

If he's living in one of the units I would look at an FHA loan.

Low money down typical "house hack" type of situation.