Fannie Mae multi family down payment requirements

2 Replies

Hello BP Family,

I am submitting an offer on a property this week. This is a duplex unit. I have recently been inform from my lender that Fannie Mae requires a 25% minimum down payment. I originally was planning on 15% as the down payment. Could I possibly get some ideas of alternative options for down payment percentages or alternative funding?

Thank you

Steve Kirsch

Hello and welcome to this site Steve! To answer your question first, there are at least 4 ways to deal with this situation. You might be able to get Owner Financing, which is typically more negotiable, secondly, you could try to get a 203K loan which is FHA insured and only have to put about 3.5% down but you have to live in one of the units for a year typically. The third option is to get a Privacy Loan which is typically more negotiable but is typically a short term loan that will require you to refinance the property's first loan.

The 4th way is to get a partner that has enough money to make the rest of the down payment needed but you might have to split any profit with them depending on their involvement. To complete my thought is if you are looking at a residential multifamily house (1 to 4 units) that is a rental scenario and get the most units when buying to reduce any impact you might experience with a vacancy and the possibility of reducing your rent with a 203K loan.

If your desire is owning rental units and money is not going to be a problem, I would like to see you by an apartment complex. Anything you heard about going straight into apartments is probably a myth. It needs to have a minimum number of units that will give you the ability to hire a on-site property manager or a Property Management Company and not tie you up with the daily routine requiring too much of your time and lets you be more productive.

Good luck to you!

1-4 units is Fannie Freddie financing. That’s pretty much the gold standard. You could get less down but they are going to kill you on the fees and interest rates.