FHA Triplex Issue: Peeling Exterior Paint

[Tyler Kress]

Hey everyone,

My wife and I are looking to do our first owner occupied house hack in order to take advantage of a low down payment. We have our eyes on a triplex which according to the analysis/calculators checks all the boxes. We were prepared to put together an offer with our realtor when she pointed out FHA will not allow it due to the peeling paint on the exterior of the house. Conventional on a triplex according to the few lenders we've spoken to is 20-25% down. She has given us a few contacts in the area for smaller banks/lenders that may consider doing a conventional loan on owner occupied triplex at 5-10% down. One of our lenders has already offered 5% down on a duplex. The list price is only $90k (not sure if that makes a difference).

I will be reaching out to lenders in the area but not sure what our chances are of finding a lender that will do such a low down payment in this case. 

My questions...

Is it better for us to make an initial offer asking the seller to put siding on the house (something we would've done in the near future anyways) and add more than enough in the offer price to cover the cost of the work? 

If anyone is local to the QC area, know of any lenders who may offer this low conventional down payment on a triplex?

Any other lenders out there who may be interested in helping us out? Though I am not sure private money would be the right solution here since we are comparing this to 5% interest over 30 years (and as I understand it private money is usually shorter term, much higher interest)