House Hack Financing

[Jeremy Taggart]

Okay so last July I bought a triplex with an FHA loan that I'm currently house hacking. I'm looking to do the same thing this year after the 1 year mark and was wondering what my next step could be. Could I get another multi-unit with a conventional mortgage and only have to put down 5% since it would be owner occupied? (I've seen mixed answers on this so that's why I'm asking) I was also thinking about using a 0% down USDA loan on a single family house and fixing it up while living in it to eventually move out and make it a rental. This would enable me to rent out all 3 units of the triplex I'm currently in as well. Any suggestions/answers would be greatly appreciated!

[Steve Bracero]

Hi @Jeremy Taggart

Congrats on the first house hack! I am also looking to house hack and build a multi fam portfolio. 

You could live in a SFR, but making it a rental, it would have to be zoned appropriately. I would check up with your town zoning laws to see how this works

I think most investments require 20% down, but I bet some with more experience then me will be able to help you out! Or you could find a partner to do your second deal with 

[Dan Mackin]

@Jeremy Taggart if you can move to the next property then do so. With MF you do run into the issue of low down payment programs being a little more sparse. Since you have used your FHA that is currently tapped out. Depending on where you equity sits you could refi that out to a conventional to free up your FHA availability again. If that is not an option then you can do the 5% down or 0$ USDA (as long as the area and property qualify) as you mentioned. To get another owner occupant loan for MF you may be able to find something for 10%+ down payment. If you find something for less I would love to know about it.

[Jeremy Taggart]

@Dan Mackin ahh man so basically 5% down would only be possible with a SFR?

[Joshua D.]

@Jeremy Taggart

I would highly recomend talking to about 5 small local bank lenders in your area and see what they come up with. Remember even with convetonal loans each lender might be different based on their "lender overlays".  I know it's less legwork to just ask on here but talking to a real lender about your specific situation is where the money is at. 

Btw, well done on getting one deal, and not stopping till you get more.  Keep pushing forward with your goals, most likely the actual path you take will look different than you imagined in your head. But it will prolly be incredibly awesome, beyond your biggest dreams. 

[Jeremy Taggart]

@Joshua D. Thanks man! That sounds like a good idea I'll get in touch with a few and see what they have to say ya never know!

[Chris Mason]

Hi @Jeremy Taggart,

The #1 problem people encounter when trying to use FHA 96.5% on the next MFR is that FHA is skiddish about using departing residence rental income, which can blow up your DTI.

• Without a full credit package in-hand, there's really no way a lender can tell you if DTI will work or not with just the units you weren't living in.
• There are exceptions, times when FHA will use departing residence rental income... but they are rarely met, and it's not one of those "oh just put this on your tax returns" things. So if it's applicable to you, your local lender will be able to let you know.