Seller financing down payment?

7 Replies

So I want to buy 2 detached rental cabins on one property that need about 30k to make them rentable. That makes it a MFR and the bank wants 25% down. I only want to put 15% down, due to the 30k rehab expenditure (25% down plus the 30k makes it less attractive). The sellers are an elderly couple who own the property free and clear. It occurred to me to get the seller to carry a small 10% second. That plus my 15% down makes 25%

My lender says this is crazy and nobody does it and it's probably against Fannie Mae regulations.

Thoughts? Alternatives?

@Tim Schroeder I am not sure on the Traditional side of lending like FHA, but we have done similar to that and are planning on doing it again with our commercial portfolio lender. We need to keep at least 10% skin in the game and the LTV ratio needs to stay at 80% or less.

Dan Dietz

Originally posted by @Tim Schroeder :
Originally posted by @Nicholas Scatton:
If your lender doesnt know fannie guidelines, you need a new lender...

 Why do you think my lender doesn't know Fannie guidelines?

 Because your first post said the lender "thinks" its against guidelines. Borrowed down money has always been a no.