Using FHA loan and Down payment assistance on a househack

[Jack Carrozzi]

Im going to househack a 2-4 unit SFR using an FHA loan. I am also trying to utilize the first-time home buyer down payment assistance program, but the site says they don't allow investment opportunities. If Im living in it and renting it out, is this still considered an investment property? If so, does anybody know how I can get a 3%-3.5% down payment and use down payment assistance for a househack property?

[Derek Brickley]

Hey Jack!

Like Terrence mentioned, if it will be your primary residence then you can take advantage of the low downpayment options and better pricing. I'm a little confused, are you looking for a 2-4 unit or a single family rental (SFR)? For 2-4 unit househacks, you would have a minimum 3.5% or 5% downpayment for FHA and conventional respectively. Typically, down payment assistance is not available on multifamily properties above 2 units. If you are looking for a duplex, then we would be able to use assistance to help you cover the 3.5% downpayment. One benefit to FHA though, is the large seller concession limit. You can negotiate to have the seller cover up to 6% of the purchase price in your closing costs. Depending on your situation, this is almost for certain what we would recommend looking at first. When using the downpayment assistance, yes it sounds great that you can buy a duplex with $0 down, but your interest rate and fees will be significantly higher. When using the seller concessions, there is no impact to your rates and the seller pays for your closing costs. If you have any specific questions, feel free to reach out.