5% Down on conventional loan on Multi-family offered?

[Jacqueline Nguyen]

Hi all! I've been reading a lot of forums on BP and saw many people say that 5% down conventional loans on a owner occupied fourplex is no longer existent. 3 out of 4 lenders I've reached out to also told me the same thing such that the lowest % down is 5% even if owner occupied for a multi-family. However, I spoke to one lender that said I was eligible for 5% down conventional loan OO fourplex because its still considered primary.

I'm feeling really uneasy about this and was hoping I can get some assistance! 3 lenders suggested I go to FHA route if I want little down but this ONE lender is saying I'm good for the conventional. Is this a red flag? I prefer a conventional loan on this fourplex but something isn't feeling right. Is the 5% conventional down on multifamily a rule across the board that all lenders need to follow or is it different for each lender? Please assist!

[Aaron Nelson]

@Jacqueline Nguyen - I believe 5% down conventional for an owner occupied quad is possible under certain loan programs but qualifying can be challenging. The "Freddie Mac Home Possible loan program" allows 5% down conventional on 1-4 units BUT to qualify you have be under the income threshold for your area (this includes the property's rental income). On top of that, you still must qualify from a DTI standpoint (which includes both the rental income AND the new mortgage payment). So yes, it is possible, but it is a puzzle and the pieces have to fit together perfectly for it to work.