All Forum Posts by: Jason Wray

FHA 203K cannot be combined as a small loan it must be used as a the main loan. You can use an FHA 203K loan and a DPA down payment assistance loan. CHENOA is a popular loan option where is covers the down payment and the renovations and repairs are covered through the 203K part.

Eamon,

First off you shold not be paying points on a primary home. Questions you want to ask should be related to program availability such as program options and pricing. Fannie Mae offers a 3% down for a SFH if you go that route. FHA is the go to for the 2-4 unit multifamily but carries the higher MIP - Monthly mortgage insurance. You can elect to pay rate buy down for a lower rate but again not broker fee's or lender points.

Compare your "APR" to other banks/lenders as well as asking for a "locked LE" Loan Estimate to see what they are offering on a (30 day lock) There is a lot of "Bait & Switch" going on right now where a loan officer sends out an LE "Not Locked" and priced on a 5 or 10 day lock for a teaser rate. Find out what thier "Turn Times" are and how fast they can close. If you cannot close in less than 30 days walk away.

Keep in mind the APR is going to tell you what you are paying for that rate and fee's in total.

Harrison,

One thing you can consider is a "Delayed Financing" option which allows you to buy a property by paying "All Cash" and getting up to 80% LTV back day after you close. This program allows a buyer to use thier own cash liquid or from a HELOC and since there is no mortgage or lien paid in cash. The program will allow for an 80% LTV cash back based off of the total purchase price plus total fees/costs.

This allows you to get the cash back and not have to wait for the 6 month title seasoning.

Connor,

Traditional DSCR loans offer a DSCR down to .75 of total rents. Have you looked into getting a a quote on a Portfolio DSCR... They also offer No prepay or up to 3 years for the lower rate option.

Most DSCR rates are in the 8-9 percentile and offer a buy down option as well for a LTR.

Joseph,

All of those reasons are related to the banks risk overlays.  Typical for a smaller retail bank and not fair to an investor.

Just need to get another quote from a big bank!

 Amy,

FNMA is a great loan that offers less down and lower mortgage insurance then say an FHA loan. So it would be the better of the choice compared to say FHA. Unless you were buying a Multifamily then FHA would have the lower down payment option. You can also look into DPA- Down Payment assistance in case you need some help with the down payment and closing costs. There area also FED Grants that you can use to help with $10-$15K.

The only thing with DPA is when if you will need to borrower cash you just have to check the seasoning requirement of the DPA payback.

Christina,

It's nice to see an Agent well versed in real estate as well as the finance/mortgage side as well!

Garrett,

If you do not own a primary home you can always take advantage of a DPA - Down Payment Assistance program offering Down payment and closing costs.

If you do own a primary home I would suggest taking out some cash through a refinance or HELOC for the down payment for an investment or Second Home.

Hi Amy,

FNMA Homestyle can take a little longer and require a lot of documentation and GC/Builder approvals. Still a great option but you can speed up the process if you simply buy the property and close with a perosnal loan or LOC for the repairs/renovations. Typically you want the property to be either "liveable" or once the first appraisal is done have the "Subject to" be reasonable enough to where it can be done within 30 days to close after repairs.

The way the market is going right now I would for sure be focusing on properties that are not turn key. Unless of course the Cash flow meets your NOI.

 Paul,

I think you are missing a valid point. My advice is within guide lines and please feel free to google Fannie Mae seller guide dated for 10/2022. Under the Primary Occupancy requirements you will see they do not state the owner "Must" occupy for (12 months) they state the buyer "Must" occupy within a 60 day period once the loan has closed.

I appreciate your concern but here is why your opinion is not related to my advice. Example: Borrower uses FHA to buy a Tri-Plex where they can use the income of the other unit to qualify for DTI purposes. If borrower decides in 6-8 months they want to refinance if equity is available they can refinance into a conventional loan - Remove the FHA MIP, lower the payment. At that point they also have the right to move out of that unit and turn it into 3 unit rental because again now that it's not an FHA loan they are "NOT" obligated to live there after the FHA to conventional conversion refinance.

This is one of the better ways to approach the BRRR method but you still must qualify. You are correct I have a responsibility to my employer but also to my customers. I have to offer options that make the most sense for each borrower as long as they fit my guide lines.

This is an option not a tactic I think this is where it may be confused. Any borrower has the right to a "Change of Life Circumstance" which is also followed by FHA. So if a borrower needs to move due to a change in employment, closer to school, closer to work, move into a bigger home GLA due to growing family, move into a smaller home GLA due to retirement or handicap, or simply moving out of state.

If what you were saying was correct that would mean a borrower/buyer could not move out of state and buy a new home if they purchased an FHA home 6 months ago? If they had to move for a new job would FHA force them to stay for 12 months.... It all comes down to a unique scenario and that is why we as Banks or you as a lender require LOX, LOE's Letter of explanations! But most importantly the DE underwriter has to approve to CTC!