All Forum Posts by: Dalton Summers

@Patrick Drury Haha, let's stop at 2 people who have been the exception/outlier that I described. We're getting away from the point. However, I'm open to some legitimate data that suggests most investors purchase an investment property before they buy a primary.

To be more clear, I'm suggesting you consider buying a 1-4 unit property as a primary residence. Pretty sure OHFA DPA allows for multi family. I've got an FHA grant that allows borrowers to purchase a duplex as a primary. Maybe save that down payment and use those funds to purchase your next investment property a month or two later. In that scenario, you've potentially got 8 doors and used the same amount of funds. Better yet, spread that $120k in funds across as many rental properties as makes sense.

@Adam Bartomeo And that's why they're your ex-business partner. Kidding, but that kind of investor is probably an outlier. I doubt there's more than 10% of investors who start with an investment property rather than a primary residence.

It always surprises me when I see folks buy an investment property before they buy their own primary. I understand the exceptions with people who live in CA and NY, but I see it here in Cleveland too. Buying a primary first will likely give you the best opportunity to qualify for free/cheap money like Down Payment Assistance, grants, and mortgage tax credits. It’s also a safer place to start as a first time homebuyer and there’s no reason to not take advantage of the perks available to you now. You will find it harder to qualify for any of those “perks” after you have a property in your name. I know that’s boring and not the home run that you may have had in mind, but it’s something to consider. Best of luck!

Have you considered using a down payment assistance (DPA) loan/grant for this purchase? Because it's unlikely that you'll ever qualify for DPA after you own a primary residence. Usually best to use free/cheap money. I have a DPA forgivable grant that should work. Or, there are OHFA (Ohio Housing Finance Agency) DPA programs that might also be able to help. Ask your lender about that, or I can refer you to someone who can do OHFA DPA. Friendly reminder that loan guidelines typically allow you to use the theoretical or real income from the other unit (the one you're not going to occupy) to help you qualify for the mortgage. I add that because you may be able to qualify for a higher price point which may impact what kind of home you decide to purchase. If you decide to use my DPA grant, I might suggest refinancing after you make 6 payments. For example, the DPA grant will give you the entire 3.5% down payment which might be $8-9k. Use those 6 months to remodel/update the property, then refinance into a Conventional loan and maybe have enough equity to remove the monthly PMI too. Best of luck!

Needlessly complicated. Also, I don't think you can get a loan for a manufactured duplex. Never heard of it. And I don't think anyone else will be able to get a loan if you decide to sell it in the future - which obviously impacts its value.

Yes, you can do Conventional, FHA, VA, and USDA loans to purchase existing or new manufactured homes. We can help with anything from singlewides, doublewides, triplewides, modular, and CrossMod. I want to note that there are additional lending guidelines that are required for these types of homes, and will highlight some of those key differences.

So first, what's a manufactured home? It is a home that was built in an indoor facility, delivered to the homesite, and placed on a permanent foundation. Some people will mistakenly use the word MOBILE home to describe a MANUFACTURED home, but those are very different things when it comes to financing them. If it was built before June 15, 1976, it is a mobile home. Most lenders out there (myself included) cannot finance mobile homes. If it was built after June 15, 1976, it is a manufactured home and is built to the construction standards that HUD, Housing and Urban Development, set at that time. Again, the manufactured home is placed on a permanent foundation and is not meant to be moved more than that one time. The only time is should have moved is when it left the manufacturers facility or dealership and when it is placed on the homesite. There is one exception to this rule for VA borrowers, but it requires additional inspections to confirm the home is functional after having been moved more than once.

There are some additional guidelines or requirements for the manufactured home itself that us lenders might have to satisfy prior to closing. First, it’s important to know that manufactured homes are seen as a slightly riskier investment and consequently have a slightly higher interest rate. For example, if today’s interest rates are 7% for a stick-built home, the interest rate might be 7.25 or 7.5% for a manufactured home. So when you see that less expensive price tag on a manufactured home (in comparison to a similarly sized- and priced stick built home) please remember that your monthly payment might be more expensive. And please don’t think that lenders are only “picking on” manufactured homes because condos also have a similar pricing adjustment to their interest rates. Closing costs are typically $1.5k higher and your homeowner's insurance will be more expensive. And good luck finding homeowner's insurance on manufactured homes that are ~25 years old. Foremost and American Modern seem to be the most popular insurance companies for manufactured.

Additionally, the home cannot be in a mobile home park, it cannot have been previously installed at another homesite, should be on a permanent foundation and/or fastened with hurricane tie-downs. Any kind of hitch or wheels must have been removed. The home must be de-titled so it’s “real” property. Full utilities must be present and meet local standards. And, it cannot be on more than 10 acres. Those are just some of the more common issues that we run into when trying to finance manufactured homes. There are a variety of guideline requirements we have to consider based on the property itself or even the loan type. For example, there are different requirements if it’s a single wide or if it’s a double wide. And those requirements might be different if you’re using an FHA loan or a Conventional loan.

Give me a shout if you want to know more about a specific loan scenario.

UWM has three investors for their DSCR loans under $100k loan amount. One has no minimum loan amount, another has $50k minimum, and the last has $75k minimum. They're named Yellow, Pink, and Orange, respectively.

Good timing. I just recently found another lender, CV3 Financial Services, who will go as low as $75k on DSCR. Jack Robinson is my account exec.

On your C/O refinance. If you're thinking a Conventional loan... did your lender say if you'll be able to pass QM with such a small loan amount?

If you're going DSCR, can I ask who you/your lender is using? I'd like to know who else can do loan amounts under $100k. The interest rate you have listed seems extremely competitive - especially given the rough news on inflation this morning.

For appraisals:

Paulk Parrish

O:440-476-1559

M: 216-586-6585 ext 103

[email protected]

www.appraisalkeys.com

I'd have suggested a down payment assistance program for your first purchase. Harder to qualify for cheap/free money as you collect more homes. Maybe wasn't a possibility given the competitiveness of the situation. As a mortgage broker, I've got a 100% financing down payment assistance grant that allows for owner occupants to purchase a duplex. See image below with more details. Alternatively, OHFA's down payment assistance might work - not sure if it allows for duplexes. Also, it's not a grant. Ask your loan officer if you qualify. For a 30 year Conventional loan, I'm at 6.5% rate (6.808% APR) for a duplex, 95% LTV, 780+ FICO, owner occupant.

And I'm assuming they're paying $2k of your closing costs - not your down payment. Down Payment + Closing Costs = Cash to Close.

For your purchase contract, I'd have suggested an escalation clause requiring proof of next best offer upon acceptance. Real estate agents in Ohio aren't allowed to lie about receiving other offers that don't exist, but I've seen it happen before. Escalation clause is an attempt to combat that potential lie. That, and escalation clause prevents you from just blindly offering your best offer out of the gate. The Seller/Listing Agent could've countered the escalation, but that's usually a "tell" to the strength of the competing offers. 

And best of luck on your first one. Go get your next one in 12 months!