FHA Financing for Multi Family Property

[Benjamin Voorhis]

I've had a lender tell me that you can't use FHA for a personal residence on a multi-family. I don't think this is true but was wondering on some advice from the BP community.

[Chris Mason]

Originally posted by @Benjamin Voorhis:

I've had a lender tell me that you can't use FHA for a personal residence on a multi-family. I don't think this is true but was wondering on some advice from the BP community.

Most lenders never want to admit when it's their specific firm that refuses to do something because of a firm-specific overlay. So lenders will frequently lie and say that "you can't do xyz" when in reality they should be saying "I and my firm specifically that I've chosen to work for will not do xyz."

Yes, you can use FHA financing to purchase an owner occupied multi-unit; you just will not be able to use that specific lender.

IMO this lying thing is a bad business practice. In my experience you get more loyalty by just being honest. 

Real life example of a conversation I frequently have: "Yes you can get a HELOC on a multi-unit investment property, but my firm can not help you because neither of our two HELOC products will go for it. That's a big gap in what I can offer, but you can in fact get that elsewhere. You may have to make a lot of phone calls before you find someone that can offer what you're after. Good luck, and don't hesitate to reach out to me with any other questions you might have." REI generally appreciate that I'm up-front with them about that huge gap in what I can offer, rather than lying and saying it "can't" be done and trying to push them on a cash out refinance of the entire mortgage that may not objectively make sense (sometimes it does, that's a different conversation). So they will go elsewhere for that HELOC, and come right back to me for their next purchase because they know I don't blow smoke. Winning all around.