3-5% down on a primary residence

[Griffin Hines]

It's my understanding that I can buy a house for 3-%5 down as a primary residence, "house-hack" it while I live there, and then rent it out fully after I've owned it for one year.

Is it possible to rent it out for short term rentals on airbnb at any point before reaching 15-20% equity?

[Jason Wray]

Griffin,

Yes, it is possible if you buy a home using FHA for an example you put 3.5% down. You can refinance your FHA loan in 6-7 months with enough title seasoning to do a "Rate & Term" refinance. You can refinance an FHA loan into a conventional or Portfolio loan to transition it into an investment. That will depend on how much equity you have in the home.

You can buy a house that is "not" turn key that needs some renovating or improvements and increase the value in 6 months. Its takes a good deal of planning and searching but these deals are out there. There is a step by step you have to become familiar with to stay within guide lines but it can be done.

One example is you can buy a 2-4 unit and move out within 6 months due to the nature of the property. You can then elect to move into a home that is bigger in GLA or single family and it will fall in line. You cannot move out of a single family and move into a 2-4 unit because the underwriters will consider that unpractical use not for primary. This is especially true if you are buying closer to either school, work or out of state.

The take away is you can rent the home out prior to the 15-20% equity the answer is the loan program transitioning.