New conventional loan options for 5% down house hacking 2-4 units!

[Henry Lazerow]

My lender emailed this out this morning. Seems like a great option for Chicago as the FHA self sufficiency rule all but eliminates Chicago priced 3/4 unit purchases. This loan will work same as Conventional terms meaning no self sufficiency test for 3/4 unit buildings. Back in 2019 when I bought my first 4 unit I used a similar program to buy with 5% down through this same lender.

....Late yesterday we received some fantastic news in relation to 2-4 unit financing.

This change will take place on November 18th and will allow clients buying and occupy 2-4 unit buildings put as little as 5% down.

Main take aways:

• 5% down on 2-4 units
• No income limits
• No self-sufficiency test
• Primary residence required
• No first time buyer requirement
• Minimum credit score: 620+ and must also pass through automated underwriting system
• Reserve requirement: Based off automated underwriting findings
• Maximum Debt to income ratio: Based off of automated underwriting findings (expecting this to be 45%-50%)
• Loan limits:
• 2-unit = 929,850
• 3-unit = $1,123,900
• 4-unit = $1,396,800

Refinances:

• Clients can now also refinance on a conventional mortgage of a 2-4 unit with only 5% equity. This is a great solution for anyone looking to refinance out of an FHA mortgage.

Definition of limited cash out refinance:

• Client is not required to take any cash out but the maximum they can take out is the lessor of 1% of the loan amount or $2,000.

Accessory Dwelling Units:

• Fannie Mae does not currently allow for the use of ADU's on 2-4 units. We do have work arounds for this and you can reach out to me directly if you have a property that has an ADU.