FHA on a Multi-Family?

[Jason Pabon]

Hi Everyone -

I know it's still a tough/competitive market out there but was wondering if anyone could share their experience with putting an offer on a Multi-family home with an FHA loan? I know it's not ideal but this is the only type of loan I could get pre-approved for. Specifically looking in Sacramento and the Bay Area so any input would help a lot.

Thanks!

Jason

[Russell Brazil]

Im not in that market...but you can get it done with an FHA loan. You just need to understand that an FHA loan puts you at a disadvantage against a cash or a conventional offer, so you need to adjust your offer accordingly. Say there are three equal offers of $500k, one all cash, one conventional loan, and one an FHA loan. So you would be last in the pecking order here. So in order to compete you need to bid higher than the others, by an amount that is able to entice the seller to take your offer. So this means escalating in large sums to compete against other offers, waiving home inspections of you can etc. The FHA loan may require the seller to perform repairs, or pay for termite treatment. So those hidden costs lessen the true net to the seller. Try bidding 5 or 10k over other offers to compete.