Lenders telling me NO to a owner-occupied loan on triplex - Advice?

[Ross Markey]

I'm in the market for my next house-hack. I found a great triplex that is within my budget, but every lender I've talked to says they won't do a 3-5% down owner-occupied loan on a 3-unit property. My intention was to use a 5% down conventional owner-occupied loan, which apparently doesn't work for anything other than single-family. Then I was considering FHA with 3.5% down, where they indicated they would lend on the small multifamily, however because I'm applying for the mortgage together with my business partner (who will not occupy the property) I've now been told that FHA is also not an option.

Does anyone have any advice on this? I always heard on the podcast and read in the books that you could use these low downpayment loan products for owner-occupied house-hacks on small multifamily with up to four units. But now it seems like it won't work. Is this a new change with Fannie/Freddie, is it just not possible when applying with a non-owner-occupant, or is there something else I'm missing? 

Any help or advice would be greatly appreciated! 

[Matt Devincenzo]

The devil's in the details...like you're finding the details of loan UW are there to keep the low down payment options for actual OO, not investors. I'm not a loan UW or processor etc so I can't recall all the specific UW guidelines but a few common pitfalls are the ones you've mentioned. For the FHE eliminate the partner and you qualify, but then you need to also confirm it will meet the self sufficiency test which is another pitfall.

You can look at the eligibility guides to confirm what the conventional criteria are and DPs are 5% for SFR, 15% for duplex and 25% for 3 to 4 unit. So no one can offer anything outside of those limits or its not a conventional loan. Same for FHA etc, so you have to either fit with the guidelines or use another product.