All Forum Posts by: Steve Wilmers

Also interested to see who can chime in here @Jonathan Feliciano.  I've done some research because I'm curious as well on the specifics.  There's a link below that I have referred to (also can just go to fha.com if you're weary of links) that has information on this topic.  Obviously you'll want to confirm any of this with your lender, but this at least gives you something to prepare with.

The common items in the article are either relocation or an increase in dependents, but it also mentions if the LTV on your first FHA loan is in a good position that will be considered as well.

https://www.fha.com/fha_articl...

Good morning!

Does anyone have experience working with zoning boards of municipalities in the Grand Rapids area for building a 2-4 unit property?  I've been looking and city/township zoning maps, but most of what I am finding is available property is limited to building the traditional single family.

Two specific questions:

1. Has anyone built a 2-4 unit in the GR area recently?  If so, which municipality and how was the process?

2. With regards to building a 2-4 unit anywhere, has anyone been able to work with the municipality on the zoning to get the multi-family approved in a traditional single-family area, without it being a larger apartment complex?

Thanks in advance!

-Steve

That's a tricky one, but your best bet is likely to talk to a few local bankers at community banks in your area and get their take on it.  I'd be curious if it's possible to get traditional owner-financing on the brick house and property, and potentially work something out with the seller to seller-finance the mobile homes.

Hi @Matthew McKinney - Is this for an initial purchase or refinance?  Also, safe to assume this is an investment property instead of your own residence?

I see I didn't exactly answer your question.  I went through this same scenario a couple of years ago and discussed it with my mortgage lender.  He said the minimum down payment I needed for a new house (owned the house I was living in at the time, with a conventional mortgage) was 5%.  From that conversation, there wasn't anything said that made me believe 5% was for first-time home buyers only.

Hi @Lucas Hammer - I don't think this will be an issue.  For the 5% down they'll take your Debt to Income into account, including both the original and new property, but assuming all else goes well on the underwriting side they shouldn't care what type of loan the first loan is.  

Hi @Jay Williams - I don't have enough wind to comment on all of the items asked, but i'll try and get to a few of them.

My advice - don't go submitting a bunch of applications blindly at different institutions.  Each application will likely result in a "hard pull" of your credit report, which dings your score a bit.  Have the conversation with an officer at each bank or credit union you go to, pull up a copy of your own report to show them, and discuss parameters before having them process the application.  Scores only come from a few different sources so if you get your scores from Credit Karma it shouldn't differ too much.

HELOC details vary between banks, but below are some common characteristics:

Rates - HELOC rates will vary based on the LTV of the loan (example, if you borrow up to an LTV of 80% chances are it's a lower rate than goin up to an LTV of 90%). Rates will generally fluctuate with the Prime rate, and typically no maximum on that rate. Fixed rates on 2nd mortgage notes are usually limited to a term loan structure (Principal and interest payments).

Hi @Michael Sharpe - His 800 credit score is likely only going to come into play if he's a co-borrower or personally guaranteeing the loan. Even then, banks providing a business line of credit (one that's lending to a LLC) will rely less on a personal credit score and more on the cash flow generated or the collateral provided.

Hi @Robin Casper - Generally that is correct, especially with single family and 2-4 unit buildings.

I spent a few years in commercial lending and that was common practice.  Granted, some "higher risk" lenders would be willing to take a look at it, but the amount you'd pay in interest at those places would likely exceed any closing costs at the bank you're already in discussions with. 

Did they give you an estimate of the closing costs?


 

Hi @Lesley Resnick,

https://www.irs.gov/businesses/small-businesses-se...

Above is a link to the IRS page providing guidance on this.  Whether there is an invoice or not, if a sum of payments to the individual/business total more than $600 during the year a 1099 is likely required.