Updated almost 2 years ago on . Most recent reply
First Home Purchase, House-Hack Fourplex
Hello!
I am currently looking to buy my first house and turned into a house hack with a fourplex,
Anyone in Texas that can recommend me lenders to get 3% or 5% as down payment since the lenders I have talked are asking for 25% down payment.
I'm doing my research but I'll appreciate any help!
Most Popular Reply
@Xavier A. Malave For a FHA you can in theory buy a 3-4 unit with 3.5% down. I say in theory because for a 3-4 unit you the property has to past the FHA self sufficiency test. What that means is 75% of the gross rental income HAS to cover the entire payment including prin/interest/taxes/insurance/FHA required mortgage insurance and any HOA dues. So, if the total rent is 4000 a month the entire payment has to be less then 3000. That is VERY hard in most markets right now due to property values and high rates. Please note that 2 units do NOT have to pass this test.
For 5% down on a conventional loan for a 2-4 unit you would have to qualify for a program called Home possible. The issue here is that your qualifying income has to be under 80% of the median income for the county that the property is located. Here is where you can determine what that number is: https://sf.freddiemac.com/working-with-us/affordable-lending...
and finally, the 25% is NON-OWNER occupied, so who you have been taking to is not versed in multi-family. You can see right from the source that Freddie Mac allows for 20% down on a owner occupied 3-4 family (as do a lot of non-conventional products): https://sf.freddiemac.com/general/maximum-ltv-tltv-htltv-rat...
Should also add, there are some non-conventional products that will allow 3-4 unit with 15% and no mortgage insurance required.
- Jay Hurst
