Banking Options to avoid PMI

[Ryan Wiles]

I am currently looking for a bank that will loan less than 25% down for multifamily units. We plan to buy a 4plex in the Atlanta area and live in it. The loan would be a First time home owners loan and I would like to avoid PMI. I know there was a reference to Trustcobank on this mornings pod cast. Is there any other advice? Thanks in advice for all your responses!!

[Christopher Giannino]

I know this isn't exactly answering your question about avoiding PMI but FHA did release that they will be cutting mortgage insurance premiums for 30-year mortgages effective January 27th.

"Borrowers who close on an FHA mortgage after January 27 will pay 25 basis points less for the mortgage insurance premium, the Department of Housing and Urban Development said."

With that being said, I like how @Brandon Hall explained his theory of PMI on podcast 196. In short, he says when analyzing the deal, treat PMI as a regular business expense. If you factor it into the deal and are still able to cash flow at your desired ROI then what does it matter? Depending on the lender, PMI will automatically drop off once you hit the 78% LTV or you can eventually refinance out of the FHA loan.

Just trying to give a different perspective of how your deal could potentially work even with PMI.