Wrapping up first house hack, Next house hack Finance troubles.

[Collin Wallace Chesnut]

Hello BP community, Looking for some traction on a problem I'm running into.  

Last year June 18th 2021, I purchased a 4 plex with a FHA Loan to house hack. As we are approaching this upcoming year I was wanting to do the same thing and though it was possible to buy another 3-4 unit property as a primary residence and get financing as a convential loan with the ability to put down as low to 5%.

Asking around to lenders thats does not appear to be the case and taking to 3 different lenders they have all wanted 25% down on a 3-4 unit property. If I go down to a duplex I only need 15% down. 

Wanted to reachout tho to see if any folks haver ever been in this position before and what other options there where. Yes, I can buy a SFH home for 5% down and get a convential loan and after talking to 3 lenders that migth be my best option next, but wanted to see what other Ideas where out there or how I can buy another Multifamily with low money down. Also with the climb in interest rates I'm not looking to refinance out of my FHA loan at this time.

Let me know your thoughts! Thanks!

[Kevin Romines]

You can only have 1 FHA loan out at a time, unless the new purchase is over 100 miles away from your existing property. FHA is the best loan you can use when buying a 2-4 unit with a low down payment. That said, you will need to refinance off FHA to clear your 1 FHA slot to then do the new purchase with FHA again.

You can get a refinance up to 95% LTV only on Home Possible fort 1-4 units, however the caveat is that there are income limits, so you will need to be sure you are within those limits. Also Home Possible will only allow 1 other financed property at the time that you purchase the 2nd property. You wont be able to use Home Possible in any future purchases.

I suggest you refinance to Home Possible if you can, if not, you will need to wait until you have 25% equity to refinance to a conventional loan or 20% equity to refinance to a Non-QM loan. At that point, you can buy another 2-4 unit with FHA.

I hope this helps?