Owner occupied - 2 family house - 5% down payment possible?

Question

I am buying a 2 family house in New Jersey. Purchase price - $509K. I'll be moving in in one of the units. I was looking to put down 5% down but could not find any programs. Can anyone please tell me where I can find these programs? 3.5% FHA is an alternative if 5% does not work out.

Upen Patel · Answer

FHA min is 3.5% down. If you go conventional, your min down will be 15%.

FHA process is similar to conventional. In fact FHA allows for a higher DTI then conventional, so in certain cases it actually better/easier.

Jason Gass · Answer

In my experience, FHA loans are more stringent when dealing with inspections by appraisers.

Peeling paint, railings, etc.

Manshi M. · Answer

Got it.  Thanks Upen!

1. What is the minimum I'll have to put down for this loan size to go conventional route?

2. Is FHA mortgage process more difficult to approve than the conventional? Is the process the same? I've bought 4 properties under the conventional plan but this would be my first under FHA.

Manshi M. · Answer

Thanks Parag and Chris!

I am trying to avoid FHA due to 1.75% upfront mortgage insurance premium. So, I am looking for a conventional program with 5% or less down.

Chris Masons · Answer

I believe you can go FHA and instead of 3.5 put 5% down. They won't say no to more then the minimum I am pretty sure....  :)

Where abouts in NJ?

Good luck and Congrats!  My first property was a 4 family with an FHA loan and I put much more down.

thx,

Chris

Parag Shah · Answer

I think PNC has a 5% down payment program, but not sure.  Inquire with them.  3.5% FHA should definitely work since it's owner-occupied, but higher MIP payment is an obvious drawback.

Owner occupied - 2 family house - 5% down payment possible?

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