FHA Loan for House Hack in NY

16 Replies

I’m looking to do my first house hack in New York. I’m really interested in Brooklyn but I’m open to other areas. I’m hoping to be within an hour or so of the city with good access to the subway. Looking for any advise on the whole process.

Thanks !

Originally posted by @Shemar Royal :

I’m looking to do my first house hack in New York. I’m really interested in Brooklyn but I’m open to other areas. I’m hoping to be within an hour or so of the city with good access to the subway. Looking for any advise on the whole process.

Thanks !

Hello Shemar,

I think you're definitely headed in the right direction. FHA House-hacking is a great way to get in the game, especially in NY. You're using little money down and acquiring acquisition experience plus property management experience.

The process typically goes like this --> 

1. get pre-approved by a lender.

2. Find a realtor

3. Find a property and negotiate the terms (price, contingencies, proposed closing date)

4. Due diligence (inspection + contract)

5. Loan + title review

6. prepare for closing (get homeowners insurance, get clear to close from bank, schedule final walkthrough)

7. Closing 

Best of luck to you on your journey & feel free to reach out if needed!

Abel

@Shemar Royal

FHA is a great product when you are able to meet the guidelines. How many units are you planning to purchase?

A SFR and a duplex you should be ok. Just keep in mind they have an upfront mortgage insurance and an annual that then stays on for the life of the loan.

A 3-4 unit requires you to meet the self sufficiency rule which can be difficult in higher cost areas where the mortgage will be high and rents won’t cover the mortgage at 75% of lease agreements.

There is also a portfolio product that I am aware of for primary home buyers that only required 5% down on a multi-family - but you have to be over conforming limits with this product.

Let me know if you have questions.

 @Rashad Ellis

Here is an explanation of the self sufficiency rule:

The maximum mortgage amount for 3-4 unit properties is limited, so that the ratio of the monthly mortgage payment, divided by the monthly net rental income does not exceed 100%, regardless of the occupancy status. This is also taking into consideration, a 25% vacancy factor.

Conforming Loan Look Up

For the SuperConforming Program, here is some of the general criteria that must be met:

1-4 Unit Primary Residential Property or 1 Unit Second Home

  • 95% LTV
  • 700 Credit Score Required
  • $3,000,000 max loan amount
  • 9 months Reserve Requirement
  • No Mortgage Insurance
  • Max DTI 45%

Hello Jerry, My name is Jeremy i am from Houston Tx. I am  currently getting a house built in the Conroe Tx area for my family and I. My question to you is what is the possibility of me getting another loan on an investment property shortly after moving into my new home? My credit it just north of 700 and i make roughly 33,000 a year. That is without my wife's income of course.

Originally posted by @Jeremy Davis :

Hello Jerry, My name is Jeremy i am from Houston Tx. I am  currently getting a house built in the Conroe Tx area for my family and I. My question to you is what is the possibility of me getting another loan on an investment property shortly after moving into my new home? My credit it just north of 700 and i make roughly 33,000 a year. That is without my wife's income of course.

  Hey man I got this notification because you mentioned Conroe I live in Conroe and if you need anything or would like to meet up feel free to reach out to me anytime 

@Abel Curiel

Thanks for the list of steps, I really appreciate it. I actually started looking at a few properties just to get a feel for what’s out there but I figured I would need to get pre approval before I really ramp things up.

@Shemar Royal

FHA doesn't have criteria on where you live in the property. You would only be able to count one of the units towards rental income for qualification purposes as it doesn't sound like it is a legal third unit.

@Jeremy Davis

Getting pre-qualified for another property with conventional will look at your income, DTI's, as well as your assets for reserves and the down payment. There is potential to consider 75% of your rental income with Fannie Mae as a new investor.

There are portfolio loans that look at the cash flow of the property only, but there are loan minimums of at least $75k to $100k. Rates will be higher with this route of financing.