Lender will offer FHA 3.5% down on SFR but not multi?

[Alex Fredette]

Hello,

I recently met with a mortgage lender who prequalified me for a $250,000 FHA with 3.5 % down for an SFR. If I were to try and purchase a multi however they told me that they would want 20 % down. I would be living on the property, but I do have my father has a co-borrower non occupant. Doing some research on the FHA site it looks like a non occupant co-borrower would only allow 75 % loan to value, but there's an exception to having a family co-borrower, which would permit the maximum financing. Is this something that is up to the lender's discretion and is something that most lenders are going to offer? Or should I find another lender and if so does anyone have any recommendations in the greater Boston area?

[Stephanie P.]

The FHA guideline for non-occupant co-borrower states:

"1 Unit properties only. Max mortgage is limited to 75% LTV unless non occupying co-borrower's meet FHA definition of "family member." Seller cannot be non-occupant co-borrower. Non-occupant co-borrowers may be added to improve ratios. Non-occupant co-borrowers cannot be used to overcome or offset borrower's derogatory credit. The non-occupying borrower arrangement may never be used to develop a portfolio of rental properties. The financial contribution by the non-occupying co-borrower and the number of properties owned may indicate family members are acting as "straw buyers". "

https://hudgov.prod.parature.com/link/portal/57345/57355/Article/8477/Does-FHA-allow-non-occupying-co-borrowers-on-a-multi-unit-property

Hope that helps answer the question

Stephanie