Real Estate Agent · Foxboro, MA · Member since 2023 · 12 posts · 4 votes
Hey All! With the community banks no longer the only game in town offering 5% down for owner occupied multi families we should see a shift in demand and utilization for 2-4 family units. Keep in mind - the property still needs to cash flow for your own purposes outside of the self sufficiency test - but if you've been trying to find a way to get involved without a large down payment this is definitely a game changer. They haven't finalized the terms and guidelines, but I'd imagine they're a bit more strict than FHA. In any case - another tool in the toolbelt.
Real Estate Agent · Beverly, MA · Member since 2019 · 358 posts · 308 votes
2y
I love this new change also for the reason if it follows normal conventional guidelines, like I assume it will, your PMI will drop off automatically. I know this takes awhile but that means you won't get stuck refi-ing if the time isn't right. That's the issue I face with my current FHA.
Lender · Fort Worth, TX · Member since 2016 · 8k+ posts · 6k+ votes
2y
@Zach Whiting good post. Keep in mind that none of these properties will cash flow - and that's ok. When we are occupying part of the property, I am holding up the potential income. However, now I can use that income to HELP ME QUALIFY for a higher priced home. That rental income will offset PART of my mortgage payment. Both of those features are big factors if you want to build wealth in real estate. Also, Fannie Mae has 100% ironed out all of the terms and guidelines to these loans. You can sell this type of a product with full faith and confidence. I put a little write-up on it that you can reference HERE if that helps. Thanks!
Real Estate Agent · Foxboro, MA · Member since 2023 · 12 posts · 4 votes
2y
Agree Andrew! I don't mean that language to be confusing. Any owner occupant would presumably have a monthly amount due barring an extraordinary deal. The issue in MA as with many other areas of the country is the high barrier to entry. It's difficult for younger aggressive buyers to position themselves prior to getting to an age where settling down and having kids takes precedence. We'll see where this takes us!
Lender · Fort Worth, TX · Member since 2016 · 8k+ posts · 6k+ votes
2y
@Zach Whiting yeah man. Quite difficult for many people out there right now. I saw a report that showed if rates decreased to a measly 6.5% that it would open up homeownership for over 1,000,000 people. Crazy.
Real Estate Agent · Beverly, MA · Member since 2019 · 358 posts · 308 votes
2y
I love this new change also for the reason if it follows normal conventional guidelines, like I assume it will, your PMI will drop off automatically. I know this takes awhile but that means you won't get stuck refi-ing if the time isn't right. That's the issue I face with my current FHA.
Cleveland, OH · Member since 2022 · 811 posts · 578 votes
2y
To piggy-back off of what Daniel said above. In another forum, a lender familiar with this loan program said that PMI doesn't necessarily fall off automatically. PMI only falls off automatically for single family homes.
For a 2-4 unit, your LTV needs to be 70% and you need to request removal of the PMI once you hit this threshold.