Rule Change! Can now do 5% Home Possible if already own property

[Henry Lazerow]

Great news for all my house hackers out there! Starting 10/29/18 the new rules take effect where you can do home possible conventional 5% down on 2-4 units while already owning other property. Previously this program was only available to people who did not already own residential real estate. 

The benefits of 5% down home possible over FHA.....

1) The PMI falls off at 20% equity. This is huge saving over the life of loan vs FHA financing where you stuck with PMI

2) Offer is viewed as stronger by sellers. For right or wrong many sellers do not like FHA.

3) Larger loan limits as shown below.

With most lenders 75% of rents will be counted as income for helping increase your purchasing power like always. 

Loan Limits

2 units: $580,150

3 units: $701,250

4 units: $871,450

Happy investing everyone :) 

[Michael Facchini]

Yep, this is definitely for people that will buy as a primary residence (not investment/non-owner occupied).  Previously HomePossible was only for owner occupants that didn't own any other property at the time of purchase (even outside the US)...but as of this change coming up, you can now own another property and still take advantage of this program by buying a new primary residence.....and as little as 5% down on 2-4units, as mentioned above.  

This is one of the most popular programs I use with my clients looking to buy a multi-family with little down.  Great rates, and there are no income limit restrictions in many areas (however, some areas do have income limits).  

This is different than the HomeStyle renovation financing.  HomePossible (Freddie Mac) is not a renovation product.  It's for a standard purchase.  

Only other correction I want to make to the info above, you cannot eliminate PMI on this product until you hit a 65% Loan-to-Value on a 2-4unit...unless you refinance. If you refinance and the LTV at that time is 80% or less, of course there will be no PMI on that new loan. But if you're trying to eliminate PMI on a current loan by simply getting a new appraisal and illustrating (via principal pay-down and appreciation) that the equity position has increased, you would need to show 35% equity (65LTV) via that new appraisal. Again, this is for 2-4units (not condos, SFR's, or townhomes). With rates on the rise, refinancing to ditch PMI will make less and less sense, vs getting rid of it on the current loan (via simply obtaining a new appraisal)....thus, wanted to make sure that was pointed out.

Hope that helps and happy multi-family hunting all!!  Happy to answer any questions, so fire away!