Down Payment on Owner Occupied Duplex in NJ

7 Replies

Hey all. I am interested in purchasing a duplex in NJ to live in and rent out the other unit. My mortgage broker says that if I want to do a conventional loan, I have to put 20% down. However, when I look on Fannie Mae's website (https://www.fanniemae.com/content/eligibility_information/eligibility-matrix.pdf), it shows a minimum down payment of 15% (85% LTV) for 2-unit conventional loans. I asked my broker about this and he said that no private companies will offer mortgage insurance if it's under 20% down for conventional. Is this all true? I don't understand why Fannie Mae's guidelines would be 15% minimum down for 2-unit, but then it's impossible to get the required mortgage insurance. Can someone please help? Thanks!

Originally posted by @Steven Cherry :

Hey all. I am interested in purchasing a duplex in NJ to live in and rent out the other unit. My mortgage broker says that if I want to do a conventional loan, I have to put 20% down. However, when I look on Fannie Mae's website (https://www.fanniemae.com/content/eligibility_information/eligibility-matrix.pdf), it shows a minimum down payment of 15% (85% LTV) for 2-unit conventional loans. I asked my broker about this and he said that no private companies will offer mortgage insurance if it's under 20% down for conventional. Is this all true? I don't understand why Fannie Mae's guidelines would be 15% minimum down for 2-unit, but then it's impossible to get the required mortgage insurance. Can someone please help? Thanks!

You can do 85% LTV, and assuming you have good credit PMI can be obtained. You may not be able to get it from that particular lender, however.

Context - http://www.investopedia.com/articles/pf/12/overlays-mortgages-prevention.asp

Chris Mason, Lender in CA (#1220177) and California (#1220177)
415-846-9211
Originally posted by @Chris Mason :
Originally posted by @Steven Cherry:

Hey all. I am interested in purchasing a duplex in NJ to live in and rent out the other unit. My mortgage broker says that if I want to do a conventional loan, I have to put 20% down. However, when I look on Fannie Mae's website (https://www.fanniemae.com/content/eligibility_information/eligibility-matrix.pdf), it shows a minimum down payment of 15% (85% LTV) for 2-unit conventional loans. I asked my broker about this and he said that no private companies will offer mortgage insurance if it's under 20% down for conventional. Is this all true? I don't understand why Fannie Mae's guidelines would be 15% minimum down for 2-unit, but then it's impossible to get the required mortgage insurance. Can someone please help? Thanks!

You can do 85% LTV, and assuming you have good credit PMI can be obtained. You may not be able to get it from that particular lender, however.

Context - http://www.investopedia.com/articles/pf/12/overlay...

Thanks for the article!  What's the best way to find a lender in NJ that will do this without running your credit at each?  Just cold calling each one around?

Originally posted by @Harjeet Bhatti :

If you do not own any property you can purchase under Home possible with 5% down payment. 

I own one other duplex as an investment property.  This will be an owner-occupied duplex.  I want conventional because I have good credit and want better terms.  The lowest allowed for a conventional I thought was 15% down, which is posted on Fannie Mae's website.  Are you saying that isn't the case?

Originally posted by @Steven Cherry :
Originally posted by @Harjeet Bhatti:

If you do not own any property you can purchase under Home possible with 5% down payment. 

I own one other duplex as an investment property.  This will be an owner-occupied duplex.  I want conventional because I have good credit and want better terms.  The lowest allowed for a conventional I thought was 15% down, which is posted on Fannie Mae's website.  Are you saying that isn't the case?

 Home Possible is for folks that do not own other real estate, not applicable to you.

To find a lender that'll go for it, I'd suggest hitting up your local REIA. If you're on a time crunch, cold calling works. No one should need to run your credit to tell you if they offer this program, just like I don't need to run someone's credit to tell them that I don't lend on 20 unit apartment buildings.

Chris Mason, Lender in CA (#1220177) and California (#1220177)
415-846-9211

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