All Forum Posts by: Jerry Padilla

@Sam Maule

I live and invest here as well. As mentioned you really need to be mindful where you purchase.

@Robert Kelly

You can also ask the seller to pay up to 6% towards closing costs with FHA. You will be required to put down the 3.5% still on up to 4 units. This is as low as you are going to get with a multi-family. Conventional does have some first time home buyer programs for SFR only with 3% down.

@Alan Strong

Will this property be a second home as well? 

Or is it strictly an investment property only? 

@Chris Mason

Is in your area and can answer.

The $1,920 is that origination fee to buy down the rate? 

If not, the fee's are high. If so, and you are paying a point, then then the rate of 5.125% seems high. 

Is this an investment single family residence? 

@Stacy Brooks

The property would have to be off the market for a cash out refinance, at least with conventional. You can start the cash out refinance prior to 6 months and close the day after you hit 6 months. 

@Dawal Limbachia

FHA has its pro's and con's. The pro's are the 3.5% down payment and up to 6% sellers concessions. It is a great way to get started and how my wife and I got started. The con's are the expense of the mortgage insurance - there is an upfront mortgage insurance and an annual mortgage insurance - that then stays on for the life of the loan. I refinanced when I reached the 80% LTV out of the FHA loan into a conventional loan, and this is what I recommend to clients as well to eliminate the mortgage insurance, as long as the rate is the same or better.

@Ryan Keenan

You can still get up to 10 conventional mortgages. They will look at your DTI's and there will be reserve requirements that increase with the number of financed properties you have. You will benefit by getting good cash flowing properties. You will be able to include rental income that is shown on your tax returns and 75% of lease agreements on the other properties that are too soon to be shown on your tax returns as well as purchases.

@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%

A conventional lender - backed by Fannie Mae and Freddie Mac - require the property to be in your personal name and won't lend to an LLC. They look at your W2, credit score, DTI's and income to determine if you will qualify for the loan.

A portfolio lender and other lenders have their own set of criteria to determine if you qualify. They will lend to an LLC, but also many times have higher rates and possibly adjustable rates as well. They have different programs but typically still look at your credit score, possibly bank statements, and or the cash flow of the property.