Buying Mutifamily Property with FHA 203K

[Justin Morris]

My wife and I are considering purchasing 2 unit mutifamily home, probably a duplex in the northern NJ area with FHA 203K loan. We'd live in one unit and rent the other one out, can we use the income from that 2nd unit we would rent when applying for the loan?

[Chris Mason]

Originally posted by @Marwin Balibrea:

Originally posted by @Chris Mason:

Originally posted by @Justin Morris:

Thanks @Chris MasonMy next question is should I find the property [,,,]

I was concerned why the lenders I was working with did not give me a pre-approval. Only an estimate of how much I qualified for... Now it makes sense. 

Or maybe they just suck. They did seem reluctant on doing an FHA 203k.

 Yeah, I really have no way at all of solidly preapproving you for a 203k. I have no clue in the world what you're going to find or how it'll play out, so I'm hesitant to put my signature on something that implicitly puts my reputation on the line if it turns out that it can't be made to work.

Homebuyers and realtors want the preapproval letter before they look at homes so they know they aren't wasting their time, but for 203k us lenders want to know WTF we're putting our signature on before we sign it. So it is indeed a bit of a chicken or the egg game.

Just know that if it's a REALLY good deal, DTI is not going to be an issue and we can work it out once in contract. I'll put my signature on a preapproval letter once we have a property and a ballpark game plan in the works.