All Forum Posts by: John Smith

Thinking a bit more about this, what if i moved out of my current residence (rented it out) and rented an apartment for myself 6-12 months? I would file taxes with my residence being the new apartment. Then, would I be able to count both properties for the FHA?

Current Plan 6-12 months

Prop 1 -my residence Prop 1 - rent Prop 1 - rent
Prop 2 - rent Prop 2 - rent Prop 2 - rent
Apartment - my residence Prop 3 - FHA MF rent and live

0 Votes

Worcester, Massachusetts

Quote from @Osvaldo Pena:

@John Smith surprised no-one has mentioned this, but have you considered doing a DSCR refi on the multi family to take some cash out which you can use on the multifamily you're looking to acquire?

I don't know too much about these but have seen these around and they seem to be very popular. Assuming I have to maintain 25% equity, I could only take out 50k, which would help but I'd still have a ways to go for a down payment in my area.

0 Votes

Worcester, Massachusetts

Quote from @Brittany Minocchi:

@John Smith there is a program that will allow 5% on a 2-4 unit multifamily if you are occupying and meet the additional requirements. It may not be offered by the lenders you've spoken to.

I've talked to quite a few and no luck. Would you know of any by chance? That would be the best case for me.

0 Votes

Worcester, Massachusetts

Quote from @Ash Hegde:

My question was for the new one - if you would be interested in buying a SFH instead of a multi, living in a room and renting out the others. That would allow you to use 5% down, though you couldn't count the rental income for DTI purposes, and of course you'd have roommates - which may not be ideal for your personal situation. On the plus side, it gets you another property with a low down payment and rental income.

Ah I understand now. That's an option, not ideal obviously, but I will do some research on what kind of rent I'd get and consider my personal situation as well. Thank you.

0 Votes

Worcester, Massachusetts

Quote from @Ash Hegde:

@Scott Trench only FHA keeps the low down payment option when buying multifamily. 15% for a duplex and 25% for 3-4 units is accurate for conventional.

This is tough without the FHA option, at some point you're going to need higher capital amounts to buy rentals. Any interest in renting out rooms in the new home and using a 5% conventional?

Ash, I'm not totally following the question. Are you talking about my current SFH or the new MF home? In the new MF home, all the units other than mine will be rented out (2-3). My SFH will be rented out as well. I don't think anyone would give me a 5% conventional on an owner occupied MF.

0 Votes

Worcester, Massachusetts

Quote from @Alban Celiku:

Quote from @Scott Trench:

Following - confused why you aren't able to use a 5% down conventional for a house-hack in your situation. Have you talked with several lenders on this point? I'd start there.

I could be completely off on this, but I'd bet you CAN use a low down payment conventional loan to do a house-hack on a small multifamily in this situation.

I agree with @Scott Trench, I have been quoted 5-20% owner occupied for residential MF as long as it meets the self sufficiency criteria in MA. If you’re going to owner occupy the property, then you should qualify for as low as 5% down payment. The traditional 20-25% down payment requirements refer to investment properties to my knowledge, unless things have changed in the past 30 days. I’d be happy to connect you to my lenders if you’d like!

Alban, if you are aware of any lenders that would do a 5% down payment for an owner occupied MF in MA, please send me their names!

0 Votes

Worcester, Massachusetts

Yes I've talked to a few but still am waiting to hear back from some. Everywhere I look it says 15% for 2 units, 25% for 3-4 units for owner occupied multi family. That would be perfect but unfortunately looks like it would have to be a SFH.

1 Vote

Worcester, Massachusetts

I am having a hard time figuring out how I would be able to finance my next property. I am in Massachusetts. Basically, I have a single family home now that I live in and a 3 family rental property. I want to rent out my current single family home and move into a 3rd property (3-4 family where I live in one unit and rent out the others). I am wondering what the lowest down payment option would be for my scenario. I wouldn't qualify for the FHA because all 3 properties will be within 100 miles and I would need that future rental income from my departing residence to count for DTI to offset the mortgage. I also wouldn't qualify for a 5% conventional (which would be the most ideal) because the 3rd property would be a multi family property. I feel like I am stuck here unless there are some type of creative financing options I'm not aware of. Otherwise, I feel like there's no way around the 20%. I appreciate any insight to loan options you have!

2 Votes

Worcester, Massachusetts

All Forum Posts by: John Smith

John Smith has started 1 posts and replied 8 times.

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