All Forum Posts by: Jeremy Stebbins

@Tyler Ferguson @Ryan Thomson - yep FHA should allow up to 6%, VA 4%, and conventional 3% but possibly up to 6% with higher down payments. Although I am not 100% sure that is always true I have only ever hit max concessions on a conventional deal.

Just keep in mind concessions only apply to eligible costs when using a lender. This means all fees and start up costs (including prepaid interest, home insurance premiums and collections for property taxes and ins. to go into escrow) - and as crazy as it may sound, for VA loans concessions can even be used to pay off the buyers debts to help qualify. Concessions cannot be applied to down payment! If you need to add costs to make sure you get your money's worth on concessions - your lender should be able to coach you on adding things like mortgage points, 2-1 buy downs, upfront mortgage insurance premiums and more to make sure concessions don't go to waste. 

@Keith Mikkelson @Ryan Thomson hmmm... Sounds like an interesting situation. Ultimately the appraiser has the final say in what type of property it is - but the lender should do their homework upfront to try to best identify whether the property is one or two units.

I do not see why FHA would have an arbitrary guideline that 'they don't lend unless there are two meters.' that seems highly unlikely but I am not sure. You should be able to do an FHA loan either way (unless you were relying on the other unit's income to qualify - that could certainly change things).

So based on how I am reading this I don't think there is an issue, if you are using FHA to target the smaller down payment of 3.5%, you should be able to put down 3.5% regardless of how the property is classified as a 1 unit or 2 unit. Perhaps FHA does have the requirement for two meters for it to be defined as a duplex (I have not heard of this before but sounds possible)... if it is defined as a 1 unit for this reason then this should not be a problem because you can still do a low DP FHA on a one unit (unless you can only qualify if it is a two unit).

The amount of meters should simply assist the appraiser in how to properly classify the property. The amount of meters should not be a defining characteristic that dictates whether or not an FHA loan can be done(at least in my experience). And just because it has only 1 meter doesn't mean there could be other defining characteristics of the property that could swing the appraisers opinion on how to classify it. Hopefully this helps, but again I am not seeing an issue I think you'll be fine moving forward.

@Efrain Flores

@Ryan Thomson

I suppose there are some instances where you might have to bring more than 3.5% for FHA... if you cannot qualify from an income/DTI perspective with the lower down payment. In other cases FHA may require a higher down payment with certain types of cosigners/non occupying coborrowers - this could override the 3.5% down requirement potentially.

@Efrain Flores

@Ryan Thomson

That is correct, FHA allows 3.5% down on a 2 unit property, conventional is 15% or higher. Where are you located Efrain? Did you say KC?

Thanks Alli!

Hey everyone,

My name is Jeremy and I am a real estate investor and loan officer who specializes in working with investors and house hackers. When it comes to money I grew up a 'fear driven' person, however after working for multiple years in real estate I have come to understand the unlimited and accessible potential that real estate offers. Even having a family and a lot to lose financially, the power of taking smart risks in real estate is nearly impossible to beat as a long-term wealth building strategy. I'm blessed to work with a network of house-hackers in Colorado Springs that continues to push me and inspire me. 

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