Getting an FHA with Relative (Out of State Investing)

[Travis Newton]

Quick question regarding the FHA loan.

In my area of Arlington/Grand Prairie, TX there aren't a ton of multifamily properties. We're working with a great RE agent who did warn us that it'll probably be an uphill climb to find a decent duplex or quad in our area. 

With that being said, I have a close relative that lives in Oklahoma City where there are a ton of duplexes, new, old, and everything in-between. I'm curious if he and I take out an FHA loan, but he lives in the property while I stay in TX, would that be frowned upon by the lender?

Essentially, it's a partnership, where I'm putting the down payment down, etc. but I need him for the location. 

Does anyone in the group have any experience with this type of arrangement for out-of-state investing? 

Thanks all! 

[Cary Verner]

Hey Travis,

Nice to speak to a Grand Prairie/Arlington native! I graduated from Arlington Lamar and my parents still live in GP. I can say that OKC does have several 2-4 unit options. There are more duplex options here than tris or quads but there are still several to be found. I would personally discourage you from pursuing an FHA loan as they are weak loans in the eyes of the seller and they require more nit-picky approval than a conventional loan. Also, with owner-occupant conventional loans the requirement is only 5% down and there are many lenders who wouldn't care that the money for Down Payment is coming from family. It happens all the time.

If you need to b connected with a lender, let me know. I'm working with a lender who is AHEAD OF SCHEDULE currently (which is an excellent trait in a lender). 

Good luck with your House-Hacking/multi-family investing!

Go Cowboys!