All Forum Posts by: Joe Stretch

@Shree P. Of course, happy to help.  The insurers aren't consumer direct, you'd have to work through a licensed broker.  I'm not able to list a phone number or email address in these post threads, and I'm sure that's for the best, but Google my name at a .com and call my office.  I can put you in touch with someone that can help. 

Moderator, hope that's ok!

@Shree P.  @Jonathan Pflueger  Made some calls on this and there IS coverage to be had through secondary market carriers, but it will be a moderately higher premium.  Hope this is helpful.

  @Shree P.  So I'm a licensed insurance agent and I agree with @Jonathan Pflueger , that is a great question! The issue here that a bulk of insurance companies will have it that the predominant opinion of highest and best use of an SFR home is just that, a single family. When you have multiple tenants in a home that is not built or zoned as units, it presents a unique risk layer having to do with personal safety. In the industry, we consider it a boarder house which in most cases, is an ineligible property for the aforementioned reasons.

Factually, it's a real life situation and makes perfect sense with the cost of housing what it is.  When there is a situation I can't help with directly, I reach out to my network of brokers who specialize in stuff like this.  I will do some research and post back with what I find... 

 Hi Albert, looks like you have some good choices in referrals here.  If I can help in any way, please feel free to let me know.  I'd be interested to learn more about what you are trying to accomplish and can maybe provide an option or 2 for you.

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@Chris Mason

Wow...hot topic!  So, I'm a new poster here, but have worked in the mortgage industry for the past 18 years, as well as pursued my own RE investments (good and bad)... to previous points in the thread, I've always been fond of the thought that, after 2008, "Closing loans is a team sport"...it takes many hands to make a deal work in and around the actual loan.  On the flip side, each new hand that touches the deal or the loan, increases the likelihood of a mistake.  That said, most mistakes are fixable, but sometimes add a few days to the closing.  Not deal breakers.

I'm currently an active retail mortgage originator, amongst a couple other things, but Its been my experience that working as a wholesale account executive from 2000 until 2016 and being on the backside of literally thousands of loan closings since the inception of the newest regulations that I can recall only one instance of a set back caused by cents on a transaction, but that was early on in the Dodd/Frank era and was the result of software, that was subsequently fixed by an addition 3 day waiting period, because that was the safest play for the lenders ***.

The take away here, again just in my opinion, is on the front side of the transaction, write the offer at whatever it takes to get the contract done, then hand it off to your favorite lender...they'll figure it out. :)

@Matt Pitch-Maxon, 

Sounds like you are getting some different opinions, and all are valid.  The reason you are getting the different view points is because there are 2 sets of guidelines in play, in general.  One, is a Fannie Mae or Freddie Mac guideline (referred to as conventional or conforming, loosely the same thing), which is a baseline guideline to be able to sell those loans on the secondary market because they meet the GSE guideline, and then on top of that, the individual mortgage lenders may have their own set of guidelines that  go over the top of the base guidelines.  The individual lender guidelines are referred to as "over-lays" because they "lay over" the top of the base guideline.  These came about after 2008 when lenders were getting loan buy back requests left and right.  Each lender can have their own over-lay.  It's risk mitigation to each lender.

Here's a link to the Fannie Mae sellers guide and is indicative of the base guideline:

https://www.fanniemae.com/content/guide/selling/b3/3.1/08.html

The 70% LTV you were quoted as needed to have with your current home sounds like a lender over-lay that I mentioned above, its not required by all lenders.

Kerry's comment above is your true hurdle here, when trying to buy another house using owner occupied financing, you haven't lived in your current house for 12 months.  If you go back into your paperwork from when you bought the house last October, read through your note, the instrument that says you will pay back the loan, yadda, yadda....part of every note states that you agree to owner occupy the house for a period of no less than 12 months.  If you go to any lender at this point, there is a 99.9% chance they will decline the loan request or counter you to investment financing, which is more cost and more down payment.  If you buy another owner occupied house now, you are violating the note you signed last October.

Without being too wordy (I already am), once October comes and goes, there is also a subjective hurdle here and that is buying a duplex to live in when your current home is an SFR. Lenders wont typically buy that unless there is a concrete reason and or hardship which would make that move make sense like moving significantly closer to work, or taking in an aging parent, etc, etc...The reason for that is because in a typical scenario, people want to move out of a duplex and have more room in an SFR. When you are going the other way, the underwriter will raise an eyebrow and question motives. Many more thoughts, but will stop it here...Hope this is helpful.

@Jonathan Pflueger, thanks for thinking of me!

I just joined recently...One of my clients suggested I join because we share a common interest in real estate