House Hacking- Family Lender

[Luis Torres]

Hello,

I am looking to house hack in Central Connecticut. I have a family member that is willing to do lend me at 3% (huge blessing for sure) if it is my primary residence. Family member's one condition is that I put down between 10-20% depending on the price point. My questions are whether

-Should I try to get a FHA mortgage instead and house hack knowing that the rental income will go toward the housing expenses. This would allow me to perhaps move out quicker and save the cash and family lender for another property in a year or two.

The thing is a lot of properties in Connecticut seem overpriced and would be hard to cashflow with the regular mortgage rates. 

[Warren Juall]

One thing I'd say is that, with a family member lending you the money, you can probably structure it as a cash offer. With FHA there are additional requirements and properties that qualify are the ones at the higher end of prices. Not that it's not worth it, because you have to consider the alternative of not buying something and not building equity, getting tax benefits, getting ownership experience, and on and on, but if you buy something with more problems (that you have to be willing to solve), then you will be able to get a better deal.