Conventional Mortgage on One Building of 4 Townhouses
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Lender · CA · Member since 2015 · 9k+ posts · 10k+ votes
5yOriginally posted by @Weng L.:
I am looking to buy new construction townhouses and talking to seller if they can sell whole building (that has four 2-story townhouses) to me as one portfolio (one property) instead 4 separate units. From financial perspective, will conventional mortgage lender's underwriting accept this property (as a 4-unit multi-family)?
Another seller has two 1-story duplexes for sell (total of 4 units), but these two duplexes are not under the same roof. There are brick pavers that connect these 2 duplexes and they share the same brick paver driveway and entrance. In this case, will mortgage lender's underwriting consider these two duplexes as one property even if you can do it with your county record as one unit?
4 units on one property is just a fourplex.
Note that "townhouse" is a description of a physical appearance, not of a legal regime.
7 Replies
- Lender · Cleveland, OH · Member since 2011 · 588 posts · 439 votes5y
You cannot finance 4 individual condos that have individual deeds with a single conventional mortgage. Maybe a commercial mortgage will work but not conventional.
Originally posted by @Eric Veronica:
You cannot finance 4 individual condos that have individual deeds with a single conventional mortgage. Maybe a commercial mortgage will work but not conventional.
@Eric VeronicaYou misinterpreted my original post. It is one deed. For example:
2 townhouses:
https://www.redfin.com/FL/Fort...https://bcpa.net/RecInfo.asp?U...
11 townhouses:
https://bcpa.net/RecInfo.asp?U...
These 11 townhouses are in 2 separated buildings.
- 5yRaymond J. RodriguesBusiness MemberLender · Miami, FL · Member since 2017 · 1k+ posts · 797 votes
Interesting. It would have to be under one deed and be legally zoned as a duplex and not single family residence. They would also want to see that there is a like-kind property in the area to use as a comparable to come to an appraised value.
This is something I would definitely run by my underwriters to ensure there'd be no hiccups down the line. I'm sure we can get a solid answer to see if this can go conventional.
Helm Mortgage Corp.5127 Reviews - Lender · CA · Member since 2015 · 9k+ posts · 10k+ votes5y
Originally posted by @Weng L.:
I am looking to buy new construction townhouses and talking to seller if they can sell whole building (that has four 2-story townhouses) to me as one portfolio (one property) instead 4 separate units. From financial perspective, will conventional mortgage lender's underwriting accept this property (as a 4-unit multi-family)?
Another seller has two 1-story duplexes for sell (total of 4 units), but these two duplexes are not under the same roof. There are brick pavers that connect these 2 duplexes and they share the same brick paver driveway and entrance. In this case, will mortgage lender's underwriting consider these two duplexes as one property even if you can do it with your county record as one unit?
4 units on one property is just a fourplex.
Note that "townhouse" is a description of a physical appearance, not of a legal regime.
Originally posted by @Chris Mason:
Originally posted by @Weng L.:
I am looking to buy new construction townhouses and talking to seller if they can sell whole building (that has four 2-story townhouses) to me as one portfolio (one property) instead 4 separate units. From financial perspective, will conventional mortgage lender's underwriting accept this property (as a 4-unit multi-family)?
Another seller has two 1-story duplexes for sell (total of 4 units), but these two duplexes are not under the same roof. There are brick pavers that connect these 2 duplexes and they share the same brick paver driveway and entrance. In this case, will mortgage lender's underwriting consider these two duplexes as one property even if you can do it with your county record as one unit?
4 units on one property is just a fourplex.
Note that "townhouse" is a description of a physical appearance, not of a legal regime.
Yea I thought it should be qualified for a fourplex too. But after talking to me loan agent, I have to buy these 4 townhouses separately because it is hard to find similar comparables during appraisal and if so it will not be able to get a loan if appraisal report indicates "unable to determine value due to lack of comparables"
- Lender · CA · Member since 2015 · 9k+ posts · 10k+ votes5y
Originally posted by @Weng L.:
Originally posted by @Chris Mason:
Originally posted by @Weng L.:
I am looking to buy new construction townhouses and talking to seller if they can sell whole building (that has four 2-story townhouses) to me as one portfolio (one property) instead 4 separate units. From financial perspective, will conventional mortgage lender's underwriting accept this property (as a 4-unit multi-family)?
Another seller has two 1-story duplexes for sell (total of 4 units), but these two duplexes are not under the same roof. There are brick pavers that connect these 2 duplexes and they share the same brick paver driveway and entrance. In this case, will mortgage lender's underwriting consider these two duplexes as one property even if you can do it with your county record as one unit?
4 units on one property is just a fourplex.
Note that "townhouse" is a description of a physical appearance, not of a legal regime.
Yea I thought it should be qualified for a fourplex too. But after talking to me loan agent, I have to buy these 4 townhouses separately because it is hard to find similar comparables during appraisal and if so it will not be able to get a loan if appraisal report indicates "unable to determine value due to lack of comparables"
You're telling me that fourplexes do not exist in your metro area?
Originally posted by @Chris Mason:
Originally posted by @Weng L.:
Originally posted by @Chris Mason:
Originally posted by @Weng L.:
I am looking to buy new construction townhouses and talking to seller if they can sell whole building (that has four 2-story townhouses) to me as one portfolio (one property) instead 4 separate units. From financial perspective, will conventional mortgage lender's underwriting accept this property (as a 4-unit multi-family)?
Another seller has two 1-story duplexes for sell (total of 4 units), but these two duplexes are not under the same roof. There are brick pavers that connect these 2 duplexes and they share the same brick paver driveway and entrance. In this case, will mortgage lender's underwriting consider these two duplexes as one property even if you can do it with your county record as one unit?
4 units on one property is just a fourplex.
Note that "townhouse" is a description of a physical appearance, not of a legal regime.
Yea I thought it should be qualified for a fourplex too. But after talking to me loan agent, I have to buy these 4 townhouses separately because it is hard to find similar comparables during appraisal and if so it will not be able to get a loan if appraisal report indicates "unable to determine value due to lack of comparables"
You're telling me that fourplexes do not exist in your metro area?
Majority of fourplexes in my metro area are 4/4, 5/4 or at most 8/4 and are very small (half size) and old (1950s and 1960s).
The subject property is four 3/2.5 2-story townhouses so it is 12/10 total, new construction. I personally found 2 possible comparables but whether they are qualified for comparables or not is very questionable
1) a 12-unit family 1/1 each, 12/12 total, similar size, in the same city but built on 1970 (there are several such 10 to 12-unit properties in adjacent cities)
2) four 3/3 2-story townhouses, 12/12 total, similar size, new construction sold on 2020, but in a different city (much closer to beach), 10-15 miles away from subject property
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