Creative Financing for Duplex

[Cody Godfrey]

I need some expert advise on financing a duplex I found for sale. It’s a beaut and would be a cash cow down the road for me but I’m having issues coming up with a way to purchase it..

I have a current FHA loan on a triplex I owner occupy. I was trying to find someone that would do a 95% LTV refi but I'm not having much luck there. I don't have 25% equity as I just purchased it last year. My loan balance is $232,000 and appraised value one year ago is $250,000. I've raised rents on the other two units substantially but I don't believe there's any way I've gotten the value near $290,000.

The duplex I’m looking to purchase is most definitely an upgrade over where I currently live. I tried finding a lender willing to do a 5% down owner occupied loan but apparently Covid-19 is tightening lending requirements and they no longer offer conforming loans through fannie and Freddie. It’s also been tough to find a portfolio lender willing to do this.. any recommendations on a nation wide portfolio lender would be great!

Seller financing is out of the question as they definitely want out from this property within the next year to build a home in florida. I considered doing a lease option sale agreement with them for one year but what if I can’t obtain financing next year? I don’t have enough cash to put 15% down for the currently owner occupied 2 unit loan Fannie and Freddie are allowing.

Any ideas would be GREATLY appreciated. Is a 1 year lease option a good idea or a dumb idea?

Thanks!

[Max Versteppen]

FHA loans for financing duplexes or multi-family homes. If you plan to live in one unit of the multi-family property, you may be eligible to finance it through a Federal Housing Administration (FHA) loan. These loans are backed by the government and can be used for properties with up to four units.