FHA Sustainability Questions - 3 Fam Owner Occupied in Boston

[Keely Aldinger]

Hello,

Currently under agreement for a 3-family in the Boston area. We are pre-approved for the price needed but being told we need to go FHA as the 20-25% downpayment is too far of a stretch for us to go conventional.

We have been working with one lender recommended by our agent prior to finding this property and he still has not provided a loan summary for the costs or range of interest rates and their costs/credits. This is my first time doing this so I thought that was the process but spoke to another lender who was able to discuss loan fees and price of points up front and was very forthcoming with information.

Lender #2 is yet to run credit or anything like that so I am still awaiting specifics pertaining to this deal. I’d like to have something to compare this to, and at this rate it seems lender #1 will not provide this anytime soon since he has been asked at least 6 times now.

I know sustainability requirements can be a bear but the property will cash flow with market rate tenants and flow well when we move in 1-2 yrs. The current tenants have 30 days remaining on their leases from the time of close, and they are below market value considerably. The two lenders we have spoken to have different opinions on how this will effect the loan. Lender #1 wants us to have the seller sign new leases at a higher rental rate with a concession. Lender #2 says he spoke a few banks (he is a broker) and the banks will consider market value for the sustainability test.

1. Any advice here on which lender is correct or any supporting personal experiences regarding sustainability?
2. Is lender #1's lack of transparency normal? He seems to be taking a lot of liberty in adjusting our down payment amount since he can see our assets, and I understand adjustment may be necessary to meet the sustainability requirement but feel there should be more of a conversation. Currently he has operated on informing us and when pressed that we are not comfortable he reverts to the original agreed amount. It would be a more productive discussion with some transparency so we can see what we are working with. 

Thanks