Zoning Issue - Legal Non-Conforming

[Manoucheka Guillaume]

FHA rejected the purchase of a duplex because the area is zoned for single family. There are several other duplexes in the area. I spoke to someone in the city's zoning department that confirmed the area was once zoned for up to 2 units and the property can continue its existing use but it has to be rebuilt as a single family if destroyed.

Are there any other cons I should be aware of before purchasing any properties that do not comply with the current zoning ordinances.

The zoning complaince is classified as legal nonconforming (grandfathered use).

I am having a difficult time finding low down payment options for 2-4 unit properties besides FHA. Any suggestions?

Freddie Mac Home Possible and Fannie Mae Home Ready used to allow 5% down for multifamily properties. Any idea why this changed?

[Manoucheka Guillaume]

@Stephanie P.

Interesting. I was previously approved for another loan for this same property and the lender was ready to close although the appraiser noted the zoning situation on the appraisal. We didn't close due to an unrelated issue which has since been resolved. When I transitioned to FHA it was rejected due to the zoning.

I will call the city to verify if they could provide me with a similar letter. I'll keep you posted - hopefully with good news.