Multi-Family less than 25% Down

[Dan Hoehn]

Has anyone had luck securing conventional financing for 4 family properties with less than 25% down?

If you happen to have a lender contact in St. Louis, please pass it on.

Thanks,
Dan

[Andrew Postell]

@Dan Hoehn if you are not occupying the property the Fannie Mae/Freddie Mac minimum down payment requirement on a 2-4 unit property is 25% down.  If you occupy the property the minimum is 15% down.  A bank is allowed to be more strict than this (so 30% down if they wanted to require it) but they are not allowed to be less strict.  The alternative here would be to use a "portfolio" loan.  A portfolio loan falls outside of the Fannie/Freddie guidelines because it's terms come from the bank itself.  It is money from the bank's portfolio of money...thus the name.  However, if you find a portfolio loan that does allow 20% down then you will pay a difference in the rate being higher, or the rate might be adjustable, or it might be a shorter term (which will make your payment higher) and sometimes it's all three of these features.  This may not be what you want to hear but it's the right information to have.  If you have more questions feel free to ask.  Thanks!