Conventional Loan Limits

[Joe Splitrock]

I am looking to acquire a 4 unit property that is selling for $750,000. My lender is telling me for conventional financing at 30 year term that there is a maximum loan limit of $453,100. So I would need to come up with a down payment of $297,000. This caught me off guard since I was expecting to only need 25% down.

I have never applied for a loan that high before, but doing some Google searching it seems this is in fact the limit, unless you are in a higher value area.

https://www.fhfa.gov/Media/PublicAffairs/Pages/FHF...

The other option I have is a commercial loan but that is only giving me a fixed rate for 5 years and I want to hold the place long term. My fear is that rates in 5 years could be pretty high.

Does anyone have creative ways around this? For example could I finance the difference on the loan, so I put 25% down, then finance the difference to get to the loan limit? That would lock in $453K at a low rate for 30 years which would be better.

[Chris Mason]

Originally posted by @Joe Splitrock:

I am looking to acquire a 4 unit property that is selling for $750,000. My lender is telling me for conventional financing at 30 year term that there is a maximum loan limit of $453,100. So I would need to come up with a down payment of $297,000. This caught me off guard since I was expecting to only need 25% down.

I have never applied for a loan that high before, but doing some Google searching it seems this is in fact the limit, unless you are in a higher value area.

https://www.fhfa.gov/Media/PublicAffairs/Pages/FHF...

The other option I have is a commercial loan but that is only giving me a fixed rate for 5 years and I want to hold the place long term. My fear is that rates in 5 years could be pretty high.

Does anyone have creative ways around this? For example could I finance the difference on the loan, so I put 25% down, then finance the difference to get to the loan limit? That would lock in $453K at a low rate for 30 years which would be better.

If $453,100 is the conforming loan limit for a SFR in that area, then the limit for a fourplex is $871,450. I'm guessing this lender doesn't do a lot of multifam? Might want to consider a lender that isn't going to drop the ball.

EDIT: I'm assuming this is not a VA loan.