All Forum Posts by: Account Closed

Keep in mind she's an FHA homebuyer, and as @Greg H. stated she MUST occupy the home as her primary residence within 60  days of closing, so regardless at least one of the tenants must vacate no matter at.   Both tenants cannot stay given FHA financing.  Hopefully the current owner is keeping his tenants in the loop out of courtesy because one will need a chance to find new housing as well...

you are capped at 75% LTV. non-occupying coborrowers are allowed on FHA loans, but when it is a multiunit, you are capped at 75% LTV on multiunit properties. If he bought a single family home and you cosigned, then you would still be elgibile for a traditional 3.5% down payment. Here is the guideline from the 4000.1 FHA handbook.

Hi Erik - you initially indicated you would be moving into the 4 plex, but then you said you were moving into a 2 bedroom apartment?  Do you in fact intend to occupy the 4plex as your primary residence?

Do both units rent for the same amount?  Depends if they are the same or if she prefers to live in one over the other.  Does she need rental income to qualify?

Agree with Chris - or if the property is unlendable and have cash on hand to fix it up and create some 'sweat equity'

is the property (second duplex) you are looking to move into a bigger, more expensive property?  How far away is it from the first property?  Is it closer to work?  we have to justify why you would be moving into the second property as you primary residence and prove you are not purchasing it to rent out both units

yes, the new primary residence housing expense will comprise your front end, and the front end + all other rental properties, car payments, credit card payments, etc (items that show up on credit report) will comprise the back end

one benefit of having the debt in the name of the LLC is that it typically does not count against the

'financed property count' that FNMA counts when lending to individuals. If you have between 7-10 properties that you are accountable for individually, using an LLC can help open up that property count for you so that you have an easier time purchasing property down the road with a mortgage

Hi Ryan - here is how Fannie and Freddie treat this -- if you are departing a current primary residence and buying a new one, you must provide the lender with a copy of the fully signed, executed lease agreement for the tenant that you intend to rent the property to, along with proof of receipt of the security deposit or first month's rent from said tenant.  The lender will award you with 75% of the rent as qualifying income. No management history is required for this.

Only your primary residence housing expense is included in front end debt ratio (inclusive of taxes, insurance, hoa and/or mortgage insurance; that expense divided by gross monthly income). All other minimum monthly payments per the credit report + the front end are included= bank end DTI ratio. There are some nuances, but this formula will give you the right numbers 95% of the time.

Shaun is correct - you pay 1.75% upfront MIP at the time of origination, and then you pay 0.85%/12 as a monthly mortgage insurance premium if you put less than 5% down, or 0.8%/12 monthly mortgage insurance premium if you put at least 5% down.

On another note, if you put less than 10% down, the monthly mortgage insurance premium is paid for the life of loan, and if you put 10% or more down, you pay mortgage insurance for 11 years.