Finding funding for FHA quad

[Chanise P.]

Hi All!

I've been soaking up tons of info over the last year and a half and getting my credit scores and savings up to par and finally feel able to pull the trigger on investing. This is my first post to the forum.

I currently have a few savings/checkings account with 3 credit unions (navy federal, merck employee, and american heritage). I checked with 2 of the 3 so far and have found some weird policies with FHA loans for quads. Navy Federal just flat out doesn't offer it(2 units or less). Merck's rates arent the greatest and I have an appointment with a mortgage specialist at American Heritage.

My question is..has anyone experienced this previously? Is there a way around this? I researched FHA and found that you can get a quad with that loan but this is pretty disheartening info i'm learning from my banks.

Also Navy Federal has amazing rates and i would LOVE to use them but i got a closing cost quote and it came in at $22k!?! Isn't that excessive for closing costs? This number didn't include the 3.5% downpayment on a 275K loan.

Any advice is appreciated!

[Chris Mason]

Hi @Chanise P.,

More liberal loan programs will have higher rates/fees, more conservative ones will have better. Owner occupied triplex and fourplex mortgages historically have higher default rates since folks historically budgeted with overly generous assumptions for rental income in mind, paired with FHA loans allowing for very high debt-to-income ratios (>50%... with the rental income counting -- think about that!).

Typically a credit union or bank will have exactly 1 FHA program, 1 conventional program, 1 jumbo program, etc, rather than having multiple of each with slightly different flavors. That's what you're running up against.