FHA Loan on land an construction Utah

[Nick Vought]

I am currently looking at investing in a duplex/four-plex in my area. I however recently came a across a piece of land that is for sale that is in a great location and is supposedly coded for multi-family units. So I have a few questions about this.

1. Does the normal max amount FHA loan also apply when buying land along with new construction and is that even possible?

2. I don't have the means to do this buy myself so I have a couple other investors, what would be the best way of going about that? just a side note this will be my first home purchase. I will be living in the four-plex, the other two will not.

3. Would there be a way to have one of the investors purchase the land and the for me to build on top using the FHA construction loan?

Let me know what you guys think! any feedback would be very helpful.

[Nick Jensen]

Hi Nick-

Here is what I know.

1.  It is possible as long as you live in one of the units which sounds like thats your plan and max amounts do apply but it goes up for multiple units.

2. Depending upon your structure, will determine how you set this up. There are several ways to accomplish this, the simplest probably being an LLC with ownership interests. The best advise I can give you here is to involve a qualified attorney, you want to make sure both you and your investors are protected if something happens.

3. There could be. If I'm understanding you correctly, probably the best way to do it would be to use a construction loan to build the units and then refi with an FHA loan in the end. If you're on both the land and construction loan, you should be able to do this.

If you need a mortgage guy or an attorney, I can point you in the right direction.  Also, I know of an off-market fourplex in SLC on 7th E and 1st S if you're interested.

Hope this helps.....Have a great day!

NJ