Conventional financing on duplexes or triplexes

[Mike Greenberg]

Just curious if you have tips on lending on multi-plexes. Seems like some lenders refuse to do investment mortgages outside of SFHs, and sometimes duplexes, and most seem to refuse to count future income, so even if I could find a product, my DTI really limits my max loan size. (for background, I'm aiming to buy a property around 100-150k)

One option I have would be to take a HELOC on my main house, buy something in "all cash" for competitive advantage, then turn around and mortgage it later with it already being tenant occupied (thus helping my DTI). Thoughts on the first or second dilemma? I'd rather not have to bother with the second if I can find a lender who'll actually lend at a decent rate on multifamily, as I can just squeak under 45% DTI at a 150k purchase price at the rates I'm seeing.

Thanks!

Reply

[Chris Mason]

Originally posted by @Mike Greenberg:

Just curious if you have tips on lending on multi-plexes. Seems like some lenders refuse to do investment mortgages outside of SFHs, and sometimes duplexes, and most seem to refuse to count future income, so even if I could find a product, my DTI really limits my max loan size. (for background, I'm aiming to buy a property around 100-150k)

One option I have would be to take a HELOC on my main house, buy something in "all cash" for competitive advantage, then turn around and mortgage it later with it already being tenant occupied (thus helping my DTI). Thoughts on the first or second dilemma? I'd rather not have to bother with the second if I can find a lender who'll actually lend at a decent rate on multifamily, as I can just squeak under 45% DTI at a 150k purchase price at the rates I'm seeing.

Thanks!

Reply

 Counting rental income from the property you are buying is not a unique and special product. It's vanilla Fannie Mae. You're encountering a combination of lender incompetence and lender overlays. DTI should never be a problem if you are working with a good REI friendly lender and buying cashflow positive real estate.