FHA loans?

[Stormy Hollingsworth]

I'm wanting to invest in a duplex. I have just started investing so I have little money and no credit. Could anyone tell me how a FHA loan can help. I read some about it on other forms, but wasn't quite understanding. Thanks for you time, Stormii H

[Jason Eyerly]

Originally posted by @Stormy Hollingsworth:

@Brie Schmidt So if i got a FHA loan and put a down payment on a multifamily, how can start renting it to other to start my investment?

Make your 3.5% down payment, get your mortgage insurance, move in to one of the units, and either use a property management company or a craigslist ad to rent out the other unit once you are ready for tenants. After a period of 1 year you can sell the property if you so choose and move out. If you live in the property for 2 out of the last 5 years, then any capital gains you make will also be tax exempt for up to $250,000. For that reason I'd recommend using FHA, living in it for at least 2 years, and then moving on if you so choose.

Keep in mind that FHA is a little strict on the condition of the property, so you will not be able to invest in a fixer upper unless it qualifies for a FHA 203k loan, which will finance rehab and wrap those costs into the loan. That's an entirely different subject, but I recommend doing your research and due diligence on FHA Requirements for the home itself, the borrower, and FHA 203k because you never know if that might become your best option.

Best of luck!

Jason Eyerly