Multfi-family lending conventional/ FHA

[Soham Sakpal]

How does financing work for multi-family FHA/ conventional loans? What additional documents would the lender require for conventional loans?

[Devin Peterson]

Quote from @Soham Sakpal:

How does financing work for multi-family FHA/ conventional loans? What additional documents would the lender require for conventional loans?

The standard process for multi vs sfh FHA & conventionally is over all the same. The additional red tape that is required for multifamilies would be revolved around the rents used to cover the mortgage payment. If you are using FHA for 3-4 families, beware of the self sufficiency rule (hard to pass, nearly impossible with todays higher rates) Conventional financing does not have this but you have to put at least 15%. Documentation wise it is all standard required docs really.

[Erik Estrada]

Quote from @Soham Sakpal:

How does financing work for multi-family FHA/ conventional loans? What additional documents would the lender require for conventional loans?

 These loans are full doc, meaning 2 years of income docs and proof of funds for closing. Also as Devin noted at 3-4 units a self-sufficiency test is required, meaning 75% of the rents from all units must exceed the proposed mortgage payment. 

In this market, conventional loans could be a better route. 

[Harjeet Bhatti]

@Soham Sakpal FHA has 3.50% down payment and Home possible loan has 5% down payment requirement for 2-4 units. Documents requirement could be different depend on client loan scenario.

[Raymond J. Rodrigues]

Hi @Soham Sakpal, do you plan on buying as a primary residence or investment property? I’d be happy to go over the specifics for each with you.