20-25% Required as Down Payment on House Hack

[Brandon Weis]

I just had a bank tell me that per new Fannie guidelines, the minimum down payment on a 3-4 unit is 20-25%, even if it is bought as a primary residence. Personally, I think they are wrong. I think they are just an extremely conservative bank and that is their interpretation of Fannie's guidelines.

I have already gotten approved from some other banks (credit unions), so I'm not worried, but I am curious if anyone else has run into a bank telling them they need at least a 20% down payment on 3-4 units, regardless of it being FHA or not. I truly just think this was a conservative bank/incompetent loan officer.

[Matthew Kwan]

Yes they are wrong. Borrowers can acquire a primary residence from up to 1-4 units for as low as 5% with conventional, as the regulation was approved last year of November 2023. You can also explore FHA with 3.5% down as well with 1.75% Upfront fee + anything with more than 3-4 units, there will be a SS rule (Self-sufficient test) to pass per FHA guideline.

If it is a legal multifamily unit, you can also use those vacant units as your rental income up to 75% of gross market rent.