1-4 Unit Owner Occupied Financing - 25% Down?

Question

Hey all, a friend of mine is looking to do a house-hack on a 3 unit. She had a call with quicken loans and they told her on an owner-occupied 4-unit, she had to put 25% down. I haven't done one of these in a while but I did a 4 unit in 2015 and that was not a requirement. I put under 10% down. Curious if anyone has experienced this recently? Also if you have any lenders who can service a quadplex owner-occupied loan with a lower downpayment (5-10%), please shoot me a PM. Thanks :)

@Brad Farber @Jay Dertzbaugh

@Brad Farber @Jay D.

Kevin Romines · Answer

An FHA loan requires 3.5% down. If the borrower negotiates that the seller pays the closing costs (up to 6% of the purchase as max. allowable) then the only money into the deal is the 3.5% down payment. Quicken loans will only do up to 2 units on FHA. That's a bit ridiculous considering all other lenders will do up to 4 units with 3.5% down payment as is allowed by FHA. I can only assume that they don't want to deal with the Self Sustainability tests on 3-4 units. That test is easily resolved, as the rents on the other 3 units just need to cover the mortgage payment.

See the link below for what they say on their website.

I would recommend that you go to a Mortgage Lender or a Broker to get this deal done. Quicken obviously chooses not to do these, for what reason I don't know?

I hope this helps?

See the link below for what they say on their website.

I would recommend that you go to a Mortgage Lender or a Broker to get this deal done. Quicken obviously chooses not to do these, for what reason I don't know?

I hope this helps?

Chris Mason · Answer

@Kevin Romines already hit the nail on the head for your specific question, but in general: friends don't let friends use rocket ships to get mortgages. Go read some consumer-written reviews, google business or yelp, or wherever you like to read reviews that isn't pay-to-play (JD Powers, BBB, etc, are p2p).

Nicholas U. · Answer

Quicken Loans I have found in the past to have higher rates and other issues.  Now I am looking into a non-owner occupied 3 unit multi-family and I need to put 25% down.

Just how market is for this type of lending if you looking at conventional 30 year fixed.

Israel Torres · Answer

I would suggest your friend reach out to local banks to the investment to see what their options are.  Local banks will know the area and will be more helpful to the average person.  The local bank is incentivized to help local business.  The online programs are just about volume.  How many "easy" loans can we do.  They wont be as helpful because that isn't their business structure.  They are trying to fit you into their box rather than the other way around.

Jonathan Farber · Answer

@Kevin Romines yes this is extremely helpful.  I'll shoot you a PM

Michael Bridgett · Answer

Same. Even being OO, banks are telling me 25-30% down for small multi. Hopefully they ease restrictions, but unfortunately I don’t see it happening anytime soon. Not good for me, since I’m stuck in a 3 unit. I was hoping to do this once a year. It’s gonna be difficult to come up with the 25% in my market

Jonathan Farber · Answer

@Michael Bridgett unfortunately not.

Michael Bridgett · Answer

@Jonathan Farber

Hey Jonathan....I'm in the same boat. Did you find anybody willing to go lower than 25%?

Jonathan Farber · Answer

Thank you @Israel Torres!!!

1-4 Unit Owner Occupied Financing - 25% Down?

Most Popular Reply