Financing Second House Hack in Rochester NY

[Alyssa J.]

My husband and I currently occupy a SFH that I purchased in 2019 using a conventional loan, and we are able to move out next fall (due to occupancy rules with my loans). I house hacked this home for two years by renting by the room, but currently do not have any renters here. I am in the beginning stages of planning to buy another property, and in my search spoke to a local mortgage broker since I wanted to get a general idea of how much we would qualify for so I can have a gauge on cash needed and know what i would be able to look for when we start planning to buy next year. When I spoke to the mortgage broker she said that the following:

(1) If I want to buy an owner occupant SFH I can do 5% down. If I want to do a owner occupant duplex/multi I need 15% down.

(2) Since I already own a home, the new home would need to either be (a) bigger (b) more rooms (c) an improvement over the current property OR I would need to rent out my current property/have it leased before I got the new home.

(3) My DTI and credit is great (and based on that I should be able to qualify for something decent in my area)

She explained that the reasoning behind (2) is to prevent mortgage fraud, since they want to ensure that I will actually occupy the home/move in. I have full intention to move in and live in the home I purchase for at least 1 year, or for the required occupancy period for whichever loan product I go with. 

I'm less worried about point (1) mentioned above, since my husband and I can either save the money or find the cash needed if I have to do 15% down. However, (2) has me concerned, since I'm not sure I would be able to find a larger home or duplex that meets that criteria. Additionally, renting my current home before purchasing the next seems extremely risky with the current realestate market in Rochester ( although things could change by next summer...we will see).

My question is- has anyone else encountered an issue like this when they started looking at lending options for a second house hack/duplex? If so, what strategy did you use to get a second home/duplex while keeping the first home for a rental?

If anyone has had a good experience with any local lenders, I would love to connect with you and the lender see what my options are.

[Dave Skow]

@Alyssa J.- if you want to be able to use  rental income to help offset the mortgage payment on present home - having a rental  agreement in place  is required ....the actual rent  date can  coincide with the closing on the new  property ...I hope this answers the  question