3 Unit - A Commercial Loan?

[Justin Holley]

Good day BP!

I have a quick question.  I have a 3 unit under contract and the local banks and credit unions keep telling me my loan is commercial, but it is a simple 3 unit. I have not run into this problem in the past.  Am I giving them too much info?  Like telling them I will not be living in the house, it's 3 units, etc.

Thanks,

Justin 

[Chris Mason]

Originally posted by @Justin Holley:

@Michele B. Zoned residential and I am not over the 10 personal loan threshold.  

The last bank (US Bank) I spoke with insisted that they are putting me in the commercial loan category and that it is still a residential loan, but because it is 3 units Fannie Mae requires 25% down.  On the BP podcast, they often talk about how one can get a 20% down residential loan on up to 4 units.  Does anyone know the language I need to you use or what I should be doing?

 Podcasts or other content >2 years old shouldn't be relied on as accurate when it comes to anything pertaining to mortgages. 

As of right now, 25% down is the standard for a 2-4 unit investment property, both Fannie and Freddie. 

There are portfolio lenders that'll go for 20% down, but rates/terms are trash to the point of killing your cashflow... split the difference between HML and Fannie for an idea of where the rate will be.