Financing my first Multi-Family

[John M.]

I am in the process of loan shopping for my first real estate purchase (2-4 unit multi family). I have gone to a mortgage broker (1 month ago) who initially told me I can do 5% down on a conventional loan and we did pre approval at $200,000. However, the interest rate I was quoted seemed high at about 4.8%. I proceeded to contact Bank of America, and the mortgage professional I spoke to said that the lowest money down on a conventional loan I could get was 20% down on a 2 unit and 30% down on a 3 unit. I have read differently here, so I asked him if that was across the board, or just for me, and he said across the board. We proceeded to discuss FHA as that would be the only option where I could put low money down (3.5%). He provided me pre approval for $280,000 with an interest rate of 3.87% (30 years). However, mortgage insurance seemed awfully high at 1.35% annual fee. This would kill just about any cashflow potential. In addition to this, all of the fees/closing costs seemed so much higher than I expected. My APR came out to 5.4%. My inexperience shines here, but the fact that this is so different from my interest rate means I am paying a lot of fees, right? He even factored in a 2% concession from the seller at closing. Where should I head next? Is it a better option for me to pursue a loan through my mortgage broker, or should I request that the Bank of America officer look into conventional financing for me again?