Real Estate Agent · Minneapolis, MN · Member since 2019 · 9 posts · 4 votes
I bought a duplex with an FHA loan and I'm currently househacking it. I want to repeat this process in 12 months and acquire another multi family with the same process. Are there any good articles or insights about the process of doing this strategy? Thanks!
It will be somewhat difficult. FHA loans aren't really investor friendly. For one it requires owner-occupation and you aren't supposed to have two loans, unless you can come up with a REALLY good reason to justify to underwriting. So, you're best bet is to refi your current mortgage into a conventional loan, so that you can use another FHA loan. Of course, if you could get a conventional mortgage on your current property, why would you have used the FHA in the first place?...
Real Estate Agent · Minneapolis, MN · Member since 2019 · 9 posts · 4 votes
5y
@David M.
Is there a process where I can get a conventional loan for my next multi family property at only 5%, 10%, or 15% if I would be using the new property as my primary residence once the 12 months has surpassed on the FHA requirement of the first property?
Well, the "process" is refinancing or getting a loan... Its not that complicated. The complication is while conforming conventional loans are good as low as 5% (even 3% in some situations), multifamilies are more complicated. I believe the requirement is 15% down for a 2 family up to 25% down for a 4 family.
You really just need to talk to a good lender.
Usually, people either get a FHA loan because "their hear" thats the way to go for a first loan. In many cases, its actually not and harder to get than a conventional loan. If your credit is strong, the conventional loan is cheaper than a FHA loan. If you are short the 1.5% down difference (3.5% vs 5%), then you may be stuck with a FHA. The Government backed mortgage insurance never comes off. At least on a conventional loan the PMI will come off.
If you need a referral for a lender, send me a direct message. Otherwise, you honestly just need to talk to you lender. If your lender can't figure this simple set of transactions for you then you need a new loan officer.