Currently, I am looking to house hack a multi-family home and I am running into a slight road block with the funding. Instead of saying it can't be done and going back to watching TV, I am looking for "how can I make this work".
The FHA loan seems to be the only option I have seeing as I do not have enough capital available on the front end for a conventional loan down payment of 15-20% (I do for some properties, however, I would then not have any emergency funds, which I do not want to do). I received the following message from one of the lenders I have been working with:
You must put down 15% or more on a 2 unit/duplex like you’re looking at- you can definitely do 5% down (or possibly less) on a single family home, but the federal guidelines for a Conventional loan require a 15% or more down payment on anything above a 1 unit. We could look at an FHA loan, which would allow as little as 3.50% down on a duplex, but there are down sides to this and we would want to make sure the property would meet FHA guidelines after you’ve seen it- I feel confident we would get approval on this if the home would meet FHA guidelines.
So the FHA route is clearly applicable here, however, I have heard that the FHA is a strict/timely process with lots of additional fees associated with it. What alternatives do I have here? Should I shop around with other local lenders? Should I pursue hard money (although I have read that using hard money is more appropriate for fix and flips)? Should I look for a private lender?
I am doing my best to think of creative financing but would certainly appreciate any sort of help you have to offer!
