All Forum Posts by: DeAnthony Edwards

I would ask the lender for clarification on why you need to prove need. I would tell them that the first property is under a VA loan and you met the owner occupancy requirements. Tell them the second property is FHA that you plan to owner occupy and you can get an FHA if you already have a VA. You could try another lender, but if the underwriter sees a problem, you need to understand what it is. The only reason I could think of for proving need is if you already had an FHA. Since you don't, I am a little confused. Ask them for clarification.

Thank you for your service to the country!

The details are important here. It sounds like the issue is that your current duplex was purchased with an owner occupied FHA loan. You want to buy another duplex or fourplex also using FHA. That is the problem. FHA is not an investor loan program. They say specifically it is not for investors, but rather a program to help people achieve home ownership for owner occupants. You can't have more than one FHA loan unless you meet very special criteria. When they "convince me" the reality is you probably can't because you don't meet the criteria. Relocating for a job or your family growing in size are the main exemptions. Just wanting another similar duplex for investing is not a valid reason.

One option is using conventional financing for the new duplex instead of FHA. There are still low down payment options within conventional financing. Another option is refinance the first duplex out of FHA into conventional so you can reuse FHA.

All this being said, make sure you have met the owner occupied conditions of your original loan. As far as those telling you to find another lender, they will all need to satisfy underwriting requirements. You simply can't have more than one FHA loan regardless of which lender you go through.

 How far it is from your second home?  Is it closer to your work?  Do you have kids or a partner where it might be a better school or closer to your partner's work?

 It sounds like he's buying it with 5% down and will have to move out of the first duplex and into this to make it his primary residence as he doesn't have the 25% down payment. 

Dear Underwriter:

I am looking to purchase another duplex similar to mine because I have never seen real estate in such a growth mode in my life. My current duplex is rented and it only took 3 days to get rented. I have extra money saved in case if for some reason the property becomes vacant. I doubt that will happen since I am sure that you know the vacancy rate in our area is 3.2% (or whatever it actually is). This property has actually made me approximately 13.5% cash on cash return over the last 3 years that I have owned it. That is the best return that I have made in quite some time. I am looking to replicate that return with another property. I will continue to have reserves in the amount of $8,000. as well as a credit line of $5000 in case of any emergencies. If you would like to learn more about investing in rental properties I would be more than happy to help you get your first investment property.

They want to know if you really know what you are doing. If you do, let them know.

You probably need to get a different lender. Up to 4 units is considered fine for conventional financing. I've bought two 4 unit buildings using conventional financing, and used conventional to refinance a seller note on another 4 unit.

Are you using a local bank?

If you are buying the second one as a rental then tell them that.  After that it is none of their business.  They need to look at the numbers (your debt and how much you can borrow)...that's it.

I dont have the 25% down payment and 3-6 month reserved. So I am applying for a VHDA program like FHA or another low down payment program. The broker knows that I am an real estate investor.