Any lenders, who can give 1.5M loan on 4plex or 3plex?

Question

Hey there, I'm researching multi family market in the Bay Area, CA. The market is terrible however if I were to live here long term, it seems like a better idea to buy a multi family and rent out others; than buying a SFH and renting individual rooms.

The problem is, real estate market is crazy expensive here, where starting price is 1.2-1.5M. Ideally I'd target for a property worth 1.6M, and pay 10%. So approximately looking for 1.4-1.5M loan.

I know jumbo loans can go as high as that much, but the problem is they'd be requiring 20% downpayment, which is not something I'd want to do.

Is it possible at this point to get a loan with only 10% downpayment? If so, which lenders would do that?

Thanks

Chris Mason · Answer

$1.5m is below the loan limit for a 4-plex in the SF Bay Area, but it's not going to pass the FHA self-sufficiency test unless the listing agent is completely incompetent and you're getting 40% off fair market value (good luck).

Duplexes do not have the FHA self-sufficiency test, that's the sweet spot.

Jared Rine · Answer

@Sarp Ka @Arjun Narsinghia

Full disclosure - I'm a mortgage broker in CA. I'm just trying to answer the question. Per my knowledge, I think the best you're going to be able to find would be 15% down payment and that'd be going on a non-qm type program. Jumbo lenders are pretty fickle these days and 2-4 units with low down payments are not available. It's hard enough to get a 1-unit Jumbo loan with low down, let alone more units. My suggestion would be to save more down payment. And don't forget about closing costs/fees. Where in the Bay are you both looking?

Arjun Narsinghia · Answer

Hi Sarp, I'm in a similar situation. We live in SF (renting) and are looking for multi-family residences (2-3 units) and use one as primary residence. This would be our first home/real estate purchase but we have a background in finance/accounting so coming into this with a proper mindset. With prices north of 1.5M, we are trying to figure out how the financing would play out if we'd like to stay in the 5-10% down range. Though we are still in the early stages of planning all of this and haven't reached out lenders, I've been scouring this message board to get more of an understanding. Where in the bay are are you looking?

Sorry, not much help to your question but hopefully others can opine!

Any lenders, who can give 1.5M loan on 4plex or 3plex?

Any lenders, who can give 1.5M loan on 4plex or 3plex?

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