All Forum Posts by: Ed Wood

1-4 unit properties are conventional loans and your best rates. For example on 30 year fidxed you'll be around 4.75% no points no fees on a SFR non-onwer occ and 4.75% no points on a 4 unit but fees were total $2500 included title, escrow appraisal etc.

Occupancy is the issue you're wife MUST live there. "Saying" she's going to live there is occupancy fraud and a felony. Pull equity from your primary as the down-payment?

High FICO and low LTV doesn't equal less paperwork these days (post '07). The refinance is simple its the complex borrowers that is the case here. Looks like they've got several investment properties, potential Dr who owns 25% or more of a company too. Any conventional loan lender will ask for the same documentation.

Conventional you won't be able to use the rental income unless you've have 2 evidence of 2 years landlord experience. If you can qualify conventional that is the way you should go.

FHA will be easier to qualify with the foreclosure and using the rental income.

Agreed FHA is the way to go on this. Especially if there isn't a 2 year landlord experience. BTW the reason why conventional loans view 3-4 units as non-owner occupied is because more of the property is rented vs owern occupied.

Use both, on some deals one will give more than the other. If you find that one is always behind the other you'll know...

With 5% down go conventional with MI it will be much less than FHA. Altough FHA rates are much better than conventional. You can easily compare the two by looking at the APR's on the quotes the lender gives you. Lenders must include MI into the APR calculation so it's a good test of loans.

Try to stay conventional if possible the money is much less expensive, also use the lender who is doing the purchase loan and do a concurrent close.

Guys, guys guys!!! I know you're both against it but just to reinforce this point for BP, anyone who applies for mortgage as a primary residence knowing it will be for investment purposes is OCCUPANCY FRAUD and is a FELONY! I can not stress this enough lenders have checks and balances in addition to the lenders the investors buying the mortgages do to and they have ways of detecting occupancy AFTER CLOSING and some will send out a investigator other will put you in a SARS report without you knowing.

OK with that out of the way here's the deal on OO and NOO loans. Borrowers are allowed up to 4 loans on properties secured by financing with the ability to pull cash out soon as you hit 5-10 properties you loose the ability to pull cash out. So you have 1 OO (owner occupied) and 9 NOO's (non-owner occupied) loans.

This is why it is sooooo important to talk with someone experience in setting up your buy and hold portfolio. Ultimately you want 1 nice home for your primary and 9 four-units maximizing your 10 loan fannie/freddie allowance.

I see what you mean but the reason why lender and banks use this rule is because with the new laws lenders on the hook making sure the borrower has the ability to repay.

Lets say I've got a borrower with current DTI of 35% which is well below the 50% DTI and I know as a underwriter the borrower has a equity line that if he decided to put out all the cash the DTI would go to 70% the investor can come back to my lender for the loan to be bough back because the underwriter didn't do all they could to PROVE the borrower has the ability to repay the loan.