Down Payment on Owner Occupied Duplex in NJ

[Steven Cherry]

Hey all. I am interested in purchasing a duplex in NJ to live in and rent out the other unit. My mortgage broker says that if I want to do a conventional loan, I have to put 20% down. However, when I look on Fannie Mae's website (https://www.fanniemae.com/content/eligibility_information/eligibility-matrix.pdf), it shows a minimum down payment of 15% (85% LTV) for 2-unit conventional loans. I asked my broker about this and he said that no private companies will offer mortgage insurance if it's under 20% down for conventional. Is this all true? I don't understand why Fannie Mae's guidelines would be 15% minimum down for 2-unit, but then it's impossible to get the required mortgage insurance. Can someone please help? Thanks!

[Chris Mason]

Originally posted by @Steven Cherry:

Hey all. I am interested in purchasing a duplex in NJ to live in and rent out the other unit. My mortgage broker says that if I want to do a conventional loan, I have to put 20% down. However, when I look on Fannie Mae's website (https://www.fanniemae.com/content/eligibility_information/eligibility-matrix.pdf), it shows a minimum down payment of 15% (85% LTV) for 2-unit conventional loans. I asked my broker about this and he said that no private companies will offer mortgage insurance if it's under 20% down for conventional. Is this all true? I don't understand why Fannie Mae's guidelines would be 15% minimum down for 2-unit, but then it's impossible to get the required mortgage insurance. Can someone please help? Thanks!

You can do 85% LTV, and assuming you have good credit PMI can be obtained. You may not be able to get it from that particular lender, however.

Context - http://www.investopedia.com/articles/pf/12/overlays-mortgages-prevention.asp