Trouble qualifying on a 2nd home via conventional loan

[Ben Visser]

We bought our first property last April owner occupied/conventional loan with 3.5% down. 

After speaking with our mortgage guy a few months ago he did a prelim pre-approval and said everything was good to go.

Found a duplex about 30 miles away from Salt Lake City in an area we plan to invest (Ogden, UT) in more down the road. Offer in and accepted. Inspection done, so we are on the clock.

Lender is now saying that since it is a second home and a duplex that conventional may not work and would require 15% down. It is very iffy that the house will qualify FHA (if the seller is even willing to do some cosmetic fixes) and we are also being told that since it is less than 100 miles away FHA might not approve a loan. Also, since it is 30 miles away with jobs closer to the other home that FHA may not buy into the reason we are doing owner occupied on the second home.

Maybe rules have changed, but it seems we are hitting a dead end on trying to buy the 2nd property. Are we stuck? Are there programs we may not know about? Suggestions?

[Upen Patel]

@Ben Visser Yes, agencies are tightening the screws. No way you are going to get a 2nd FHA in under 12 months and less then 100 miles away. To top that, you acknowledge that you are doing this to buy an investment property with low down pays, as the job is closer to the current house.

After you have meet your 1 yr occupancy requirement, your best option is a 15% down conventional loan.