House hacking 3-4 units multiple times? Best way to do it?

[Clayton Hepler]

Hello, I have an FHA 203K loan that I closed last year in July on a 3 unit. I would like to house hack again with another conventional loan on a 3-4 unit. Any suggestions on what type of loan I could get that has a construction component with it and also has a low down payment? It seems like the convention 97 is ruled out, because I don't qualify. Also, it seems like some lenders would look down on moving into another investment property in the same neighborhood to house hack after 1 year? Who has had experience doing this?

[Matthew Brill]

Your best option I think is to refinance the current property to a conventional loan if you have 20% equity from forced appreciation from the rehab. You can then reuse your FHA/203K. If not, you will have to check out local banks/credit unions to see if they have any special financing programs for purchase that includes a construction loan.

[Paul Welden]

@Clayton Hepler

Look into the Fannie Mae Homestyle renovation loan. It includes purchase money + rehab money into 1 loan and can be used for investors. 

[Clayton Hepler]

@Paul Welden, can a Fannie Mae Homestyle renovation loan be used for a multi unit? I put a HELOC on my property so I cannot refinance my FHA

[Nicholas Edwards]

@Clayton Hepler

Unfortunately, you cannot use Fannie Mae’s HomeStyle product on a multi unit investment property. The only investment property that qualifies under the program is a single family home! Hope this helps some!

[Nicholas Edwards]

@Paul Welden

Unfortunately investment property eligibility under the HomeStyle product is limited to single family homes! Good thought though because this product is great if your going to be a first time home buyer with low money down and someone is buying a multi-unit to house hack! Definitely a great alternative to FHA 203(k) loans for first time homebuyers who are house hacking!

[Matt Devincenzo]

@Nicholas Edwards I think the Homestyle can be used on a MFR as long as it is also the borrower's primary residence. It's only eligible for a 1 unit if the property is an investment only...

[Paul Welden]

@Clayton Hepler

The Homestyle can be used by investors but only on 1-unit properties.

https://singlefamily.fanniemae.com/media/5041/display

[Paul Welden]

@Nicholas Edwards

The Homestyle can be used by investors but only on 1-unit properties.

https://singlefamily.fanniemae.com/media/5041/display

[Paul Welden]

@Clayton Hepler

The Homestyle can be used on

a 2-4 multi-unit property as long as you occupy one of them as your primary residence.

https://singlefamily.fanniemae.com/media/5041/display

[Paul Welden]

@Nicholas Edwards

The Homestyle can be used on

a 2-4 multi-unit property as long as you occupy one of them as your primary residence.

https://singlefamily.fanniemae.com/media/5041/display

[Stephanie Medellin]

@Clayton Hepler  Homestyle is available for 3-4 units on a primary residence, but still requires 25% down for 3-4 units.

When applying for loans, don't refer to a house you intend to live in as an investment property.  Even if it has more than one unit, it's still considered a primary residence for lending purposes.  That will prevent some confusion with your loan officer.

[Nicholas Edwards]

@Paul Welden

With the specific scenario presented by @Clayton Hepler getting a HomeStyle loan through underwriting as a “Primary Residence” is going to be tough. Most underwriters are going to look at this scenario and say he has no intention of moving out of his current multi-unit. While they do allow up to 4 units for a “primary residence” it’s going to be difficult convincing underwriters/investors otherwise.

[Nicholas Edwards]

@Matt Devincenzo

Yes that is true but getting a loan in this specific scenario through underwriting presents challenges. Convincing underwriting that someone is going to move out of their current multi-unit into another and use it as a primary residence is a challenge. Many times they're going to look at this and say it's being used as an "investment property" even though you might have every intention of moving into it. Additionally, as @Stephanie Medellin mentioned you will need a 25% down payment on multi-unit property. At that point you should just refinance out of the 203(k) and utilize the FHA program again.