Updated about 5 years ago on . Most recent reply
Conventional low downpayment Loans
I am in New York and bought my first home, a 3 family a year ago with an FHA. It's cash flowing nicely and it's what inspired me to want to do it again. I went to my RE Agent to discuss another multi-family purchase (which I intend to move into) and he informs me it's not possible. The bank will not allow me to use 'primary residence' as a reason for low money down because I already used it, and have a primary residence. Now , I am restricted to a 20% down conventional loan unless I find more creative ways to finance. I asked my first banker and he said 'yup true'. I'm still doubtful but I hesitate to go directly to another bank to ask, because I'm not believing anyone at this point since I hear this advice given all the time on the bigger pockets podcast! It CANT be true cant it??. looking for a general consensus I think.
Most Popular Reply
Hey Kim,
I went through this process a few months back and they are correct, to a certain degree. The way to get another low down payment FHA would be to refinance your 3 family. This would open you up to using your FHA loan again elsewhere.
As for conventional low down payment, good luck. I will not tell you its impossible as anything is possible, buts its going to be very hard. Many banks stick to the Fannie Mae/Freddie Mac rules of a minimum of 20% down owner occupied conventional or 25% down for an investment loan.
If you did not want to refinance the FHA loan, I would recommend reaching out to a number of local credit unions and seeing what options they have.
Good luck!