5% Down Owner Occupied Quadplex

[Jared Schweiss]

Hi All,

I am looking to get into my first house hack. It is a 4 unit that needs a lot of cosmetic upgrades. I wanted to go with an FHA loan, but due to the self sufficiency test, the current rental rates do not pass the test. The future rents would pass the test, but needs the upgrades. Therefore, a normal FHA loan seems to be out of question.

The other ideas floated to me were FHA 203k loan. I have no experience with this, but I heard that this route is easier said than done as contractors are not excited to take on the additional FHA requirements work. Plus, I was hoping to do a lot of the work myself and not hire it out.

My question to you all: is there a way to get into an owner occupied 4 plex with a conventional, low down payment? And would anyone recommend doing a FHA 203k loan instead and/or have feedback on it?

Thank you for the help!

Thanks,

Jared

[Eric Veronica]

There is a conventional program out there that allows you to qualify with a 5% down payment.  The program is called Homepossible.  

The one very large catch is that your qualifying income must be under 80% of the area median income level.  This disqualifies a good portion of potential buyers across the country.  Especially those in areas where home prices are high because if your income is below 80% of the area median average then you are unlikely to qualify for a mortgage. 

With that being said this program is still being used in lower cost areas throughout the Midwest and South.  Within the past few months we have closed 5% down multi units in Ohio, Michigan, Indiana, and Alabama.