Fourplex FHA finance as a non occupant owner

[Eric Bilderback]

I have a buddy who is looking to by an fourplex with an FHA loan I would be his realtor which is awesome.

His mortgage guy told him that I could by this place with him on an FHA loan. I would have to apply for the loan with him but we would still only need to come up with 3.5% for the down payment. He would be required to live there for 1 year. I wouldn't have to live there at all and still only have to pay this small downpayment.

My question is is this correct?  It seems to good to be true.  Is there any kind of catch?  I know my friend is planning on living there but what if he moved out would I then need to move in?  Any information you guys know about this would be greatly appreciated.

Thanks,

[Chris Mason]

Originally posted by @Eric Bilderback:

I have a buddy who is looking to by an fourplex with an FHA loan I would be his realtor which is awesome.

His mortgage guy told him that I could by this place with him on an FHA loan. I would have to apply for the loan with him but we would still only need to come up with 3.5% for the down payment. He would be required to live there for 1 year. I wouldn't have to live there at all and still only have to pay this small downpayment.

My question is is this correct?  It seems to good to be true.  Is there any kind of catch?  I know my friend is planning on living there but what if he moved out would I then need to move in?  Any information you guys know about this would be greatly appreciated.

Thanks,

FHA guidelines are a PITA to look up so I can't remember which number it is, but at the last minute the underwriter doing her final checks is going to call for 20% or 25% down in the scenario you just highlighted, assuming there is no fraud afoot.

This is not a good tree for you to be barking up.

Non-family non-occ coborrower + FHA + 3.5% down + 2-4 units = not a thing.