All Forum Posts by: Clint McAllister

@Stephanie Medellin She would be to be the occupant co-signer for the FHA and her debt to income wouldn't be ideal right now

@Didier Bizimungu

Thank you for the response! And thanks to everyone who threw their two cents in.

Hey everyone!

I just posted a few days ago about my situation, but this time I will simply:

In short- I am currently under contract for buying a property zoned as a duplex/multi family. I did not find out until a few days ago that it was zoned as such (was under contract for 10 days already, with my escrow deposit a week in). I should mention my dad is a co-signer and will be helping me with the down payment.

The property has a 3/1 house with a detached garage with renovated income apartment on top, which I plan to rent out.

Now, we have hit a huge snag. I have been told that my original plan (conventional loan with 5% down) can no longer happen because of the zoning. The minimum for multi family/duplex is 15% down, which may not be feasible.

I would just switch it to FHA, but I have been told the co-signer on a multi family FHA MUST be an occupant. Is this actually true?? Is there a way around this AT ALL with FHA??

What can be done here? I’m trying to keep the process moving and really want to see this through.

Thank you!

@Guifre Mora Thanks for the response. To my knowledge, it was the underwriter for the loan who brought it up while the loan was under review today.

Hey all,

I am currently under contract and ran into a big curveball weeks into my purchase. I’ll explain:

I am currently renting a house in St Petersburg, FL with a detached garage/apartment on the property, which my landlord uses for AirBnB.

Recently, my landlord came to my girlfriend and I saying he wants to sell the house. After some thought, we figured we would offer to just buy it from him, with the idea in mind that we could supplement much of our mortgage with the detached guest house.

After lots of conversations with a lender, I was pre-approved for the ~$300K the owner wants, and I was able to work out a Conventional loan with 5% down, owners pays 3% towards closing costs (he’s a good guy and agreed). My dad also agreed to co-sign with me because, well, Covid-19 currently has me out of my second job temporarily.

With all this seemingly worked out, my dad and I sign the contract for the house purchase, sign the loan application, and have an inspection done last week. I also dropped a check off to the title company.

Now here’s the real knife to the heart- I get a call this morning from my lender telling me that my the property is zoned as a multi-family home (duplex) and not a single family home... meaning that I can no longer do a conventional loan with 5% down. The MINIMUM is now 15% down, or $40,000+ ! There is no way that can happen.

And forget about FHA, since my girlfriend is currently not working till further notice.

Why this wasn’t brought up much earlier in the process is beyond me. It took getting it to the underwriters this late in the game to inform me of this situation.

So the question I have now is, is there any way around this apparent rock-solid rule of 15% down? Or maybe even more realistically, could my landlord contact the county and have the property rezoned into a single family home so that my original down payment of 5% could work? I’m truly devastated about this situation and really don’t want to lose this house.

Thank you for reading!