Multi-Family Investment Question

[Moti Bariso]

I have a few questions about multifamily investment and hopefully you guys can help.

I currently own a primary residence (single family) and a duplex. I purchased both with conventional financing putting 25% down for the duplex and 6% for the single family since I was occupying it. I have lived in my primary residence for over a year and I am ready to move on to the next chapter.

My plan was to get a 4-plex and owner occupy one of the units and put my single family up for rent. I was under the impression that I could acquire it using 5% down and get a Freddie Mac loan; but my banker informed me that the laws changed this year and I would have to put down a minimum of 20% if I was to occupy and 25% if not occupying one of the units. Otherwise I would have to do an FHA loan and that comes with upfront premium insurance (I believe he said about 1.25% of the total amount added to the loan) and also the PMI would never fall off until I refi it down the road once I have built up enough equity; which just adds more and more costs. Also said 75% of the unit rents would have to exceed the principal, interest, taxes, insurance, and PMI (tough when occupying one of the units)

Does anyone know when this went into effect and if there’s any other routes I can go where I can leverage minimal cash and also don’t have to rack up all the extra fees? Any advice would be appreciated.

Thanks in Advance!!