4 plex lending standards

[Patrick Flanagan]

I recently talked to a mortgage broker, I’m selling my single family house and looking to buy a 4 plex.

I was kind of surprised to find out that fha or va Loans won’t even lend to you if 3 out of the 4 units don’t cash flow or equal to the mortgage amount.

I’ll be living in one unit. So I’m confused on why they will led me money on a single family home with a $1900 mortgage where I have no one but myself paying the mortgage.

Example-

650,000 4 plex

Unit 1-$1000

Unit 2-$1000

Unit 3-$1000

Unit-4 id live in

Mortgage is $3400 a month.

My income will way more then cover the difference from the loss of rent vs the mortgage.

They will not let me give me a loan on this property because the 3 units don’t cash flow or equal the mortgage.

So I’m curious if I need to speak with another lender or is this the basic rule that I completely missed?? I’ve just never heard of this standard.

[Joseph Firmin]

Talk to more banks, but at the end of the day, they need to ensure that either you have the DTI to handle the 4 plex mortgage or the property is already leased up and the rents cover it. Doesn't seem strange to me.