*HUGE* "house hacking" mortgage guideline change in pipeline

[Chris Mason]

Home Possible from Freddie Mac has long been my favorite 30YF mortgage product. 95% LTV on a 2-4 unit property you will live in, but no FHA downsides.

Specifically...

Conventional alternative to FHA that requires 5% down for up to 4 units.

Rental income can be counted towards mortgage-qualifying income @ 75% of value.

Not a first time homebuyer program, but cannot currently own other real estate. <--- what's this?! Keep reading and pay close attention!

Unlike FHA, PMI drops off once you have the equity. No need to refinance.

Stronger offers, compared to FHA.

No FHA property standards. Normal Freddie Mac property standards.

No FHA "self-sufficiency test" that kills transactions at the last minute.

Underwritten and funded in-house, no send-off to an outside Agency for approval.

That's all great, but the problem that frequently came up is historically (and for the next 2 months) you couldn't own other real estate. Ouch. Basically it was only useful if you were just starting out and didn't already own 1 or more homes.

But check THIS out...

Income limit lookup tool: http://www.freddiemac.com/homepossible/eligibility...

You'd be shocked how many census tracts have an income limit of, and I quote, "no income limit." 90% of Oakland, for example. That's where this is a good fit, since if it's a good rental property with good rents, boom those rents will push you over the income limit, if there is one. Check the above link for your area, it's a simple map where you can type the city in and click on parts of the city to find out where your financial success will not disqualify you.

Another thing that historically (and for the next two months) came up was that the loan limits were lower than FHA. Now it's going to be waaay higher, in high cost of living areas like the Bay Area and San Diego, $870k for a duplex and $1.3m for a fourplex!

Almost all the legacy content (blogs, podcasts, etc) pushing FHA loans for folks looking to owner occupy a 2-4 unit property is now obsolete.