Details on how to qualify for a 5% down loan

[Ethan Dezzani]

I am looking to buy my first property while in college. I have narrowed it down to a 3 or 4 bedroom single family with immediate value add potential. My plan is to rent out the rooms to other students. I have been told I can qualify for a 5% down loan if I have a co borrower. My question is whether or not I would personally have to live in one of the rooms to qualify for this kind of loan. I know that for an FHA I would need to, but in my senario where I would need a co borrower for all W2 qualification for the loan this would not be applicable.

[Ethan Dezzani]

Quote from @Kayla Givens:

Hey, @Ethan Dezzani! Congrats on getting a jump on things while you're in college - I wish I had had the insight and thought to purchase a home to house hack while I was your age! I'm curious why you were told you would need a co-borrower to get a 5% down option? Can you share a little more insight into what your lender told you? Typically, if you are going to occupy the property as your primary residence, you can purchase a home for as little as 3.5% down using an FHA loan and 5% down using a conventional loan. If your debt-to-income ratio supports it, I would definitely go for the conventional loan option.

If I were you, I'd definitely plan on occupying one of the rooms. This way you get hands-on experience with property management and can take everything you learn with you when you get the next property. 

 Hey Kayla,

Thank you so much! I need a co borrower because being a full time college student my income does not qualify me for these loans. I think I could not do the FHA because if I did have a co borrower they would not be living in the property. I am currently happy with my current residence and was trying to see if there was a way to qualify for a 5% down without me or my co borrower living on the premises.